Mixed news at the pump: fuel levy rises while prices drop

Daily Maverick

2 days ago

The Western Cape High Court has dismissed the EFF's urgent bid to block a controversial fuel levy hike—just as fuel prices dip. From midnight, levies rise by 16c (petrol) and 15c (diesel), despite constitutional questions. It's a pump paradox: taxpayers pay more, but pump prices briefly fall.
In a ruling handed down yesterday, Judge Nathan Erasmus found that the EFF's application lacked urgency and did not meet the legal threshold for interim relief. The court did not engage with the broader constitutional challenge itself, which the EFF had previously framed in its initial filing as a possible Part B of its legal strategy.
A tax fight rooted in Budget 3.0
The levy increase was announced in Finance Minister Enoch Godongwana's revised Budget 3.0, tabled in May following the political fallout and eventual withdrawal of VAT hikes in earlier budget versions. Treasury estimates the fuel levy will raise about R4-billion in the 2025/26 fiscal year.
The EFF has argued that the use of Section 48(1) of the Customs and Excise Act to implement the fuel levy increase amounts to an unconstitutional bypassing of Parliament. Section 77 of the Constitution requires that all new taxes be passed via a money Bill through the National Assembly.
Arguments on constitutional compliance
Representing the EFF, Advocate Mfesane Ka-Siboto told the court: 'The fact that this has happened before does not make it lawful. Past practice is not a substitute for constitutional compliance.' He described the move as a case of 'taxation without representation.'
The Treasury, represented by Advocate Kameel Premhid, countered that Section 48(1) had long been used lawfully to adjust fuel levy schedules. He argued the measure was an administrative amendment within an existing framework, not the introduction of a new tax requiring legislative approval.
What this means for you
For consumers, the fuel levy increase translates into higher petrol and diesel prices at the pump, effective immediately.
This could lead to broader knock-on effects on transport costs, food prices and inflation, particularly for lower-income households who spend a greater share of their income on fuel-linked expenses. Treasury maintains the hike is necessary to address fiscal gaps left by the abandoned VAT proposal.
The fuel levy increase will be offset by a decrease in fuel prices – which also kicks in on Wednesday, 4 June. The Department of Minerals and Petroleum Resources (DMPR) announced the following price decreases yesterday:
Petrol 93 (ULP & LRP): ⬇️5cents/litre.
Petrol 95 (ULP & LRP): ⬇️5 cents/litre.
Diesel (0.05% sulphur): ⬇️ 36.9 cents/litre.
Diesel (0.005% sulphur): ⬇️36.9 cents/litre.
Commenting on the changes, the DMPR noted that over the last month, there has been a decrease in the average Brent Crude oil price from US$66.40 to US$63.95, largely on the back of continued global trade uncertainty,
Parliament distances itself from the damage
Parliament, which was cited in the court papers, but not the target of any relief, issued a brief statement after the judgment: 'Although cited in the application, no relief was sought against Parliament. Parliament's position throughout the proceedings was to abide by the outcome of the court process. Accordingly, Parliament will comply with the court's ruling.'
Oversight loophole or legal mechanism?
In its legal representations, Treasury has argued that Section 48(6) of the Act ensures Parliamentary oversight by requiring the amended tariff to be tabled after the fact. The EFF, however, contends this form of post-implementation tabling falls short of the constitutional threshold for public finance legislation.
EFF's Part B remains unclear
In a short statement on X after the ruling, the EFF said: 'We are committed to fighting the fuel levy increase in court and in Parliament.' However, the party did not explicitly confirm that it would pursue the Part B constitutional review.
Whether the EFF returns to court or not, the broader legal and political debate over fiscal authority, oversight and the democratic control of taxation is likely to persist. DM