EFF files urgent interdict to stop proposed fuel levy hike

Finance Minister Enoch Godongwana is facing another legal challenge after the EFF filed court papers in a bid to halt a proposed increase in fuel levies.

This is the latest twist in a months-long tussle over the budget after the value-added tax (VAT) debacle.

Fuel levy

In his budget speech last week, Godongwana announced a fuel levy increase of 16c for petrol and 15c for diesel, which would take effect on June 4.

Godongwana stated that the levy increase was the only new tax proposal in the third version of his budget.

He, however, did note that this alone will not close the fiscal gap over the medium term.

The levies are part of the government’s revenue generation for 2025-26, following the withdrawal of the 0.5 percentage point increase in VAT in April.

ALSO READ: Treasury reverses proposed VAT hike, will remain at 15%

Legal challenge

In papers filed in the Western Cape High Court, the EFF stated that it wrote to Godongwana, arguing that raising the fuel levy would harm the poorest South Africans and undermine economic growth.

“We took this action after repeated efforts to caution the minister and appeal to his conscience failed. We wrote to the Minister, urging him to consider the impact of this increase on the poor and working-class people of South Africa, especially during a time when the cost-of-living crisis is deepening.

“We also reminded him that, just like the VAT increase, raising the fuel levy without introducing a proper Money Bill is unlawful and undermines parliamentary oversight,” the EFF said.

Letters to parliament

The EFF said it has also written to the Speaker of the National Assembly, Thoko Didiza, and the Chairperson of the Standing Committee on Finance, Dr Joseph Maswanganyi, about the fuel levy hike.

“We warned them that if parliament proceeds to adopt the 2025 Fiscal Framework and Revenue Proposals that include this illegal fuel levy increase, the entire budget process will be placed in jeopardy, the party said.

“Allowing such an increase without a Money Bill risks the entire national budget being declared invalid by the courts, potentially long after funds have already been spent.

“This would severely damage the constitutional standing of parliament, undermine financial accountability, and cause serious consequences for service delivery and public confidence in government,” the EFF said.

What is the fuel levy?

The EFF has warned that failure to comply with these demands may result in further legal action.

The fuel levy is a tax charged on every litre of fuel sold, with a portion going to the government and another to the Road Accident Fund (RAF levy) to compensate victims of motor vehicle accidents.

It amounts to 18% of the retail price, while the RAF levy is about 10%.

This has remained unchanged since 2022 to mitigate the effects of higher inflation resulting from increased fuel prices.

ALSO READ: EFF calls for ‘apartheid tax’ counter instead of VAT hike [VIDEO]