Temporary diesel levy relief is unlikely to substantially reduce the cost of moving goods, as earlier price increases are still working their way through supply chains, according to economist Dawie Roodt.
Responding to questions from Freight News, Roodt said he expected the relief to have limited impact on transport costs and the prices paid by businesses.
Finance Minister Enoch Godongwana announced the temporary relief in his Medium-Term Budget Policy Statement on October 21. The fuel levy will be reduced by R3 a litre for diesel and R1.50 a litre for petrol from November 4 to December 1.
The relief will then be scaled back to R1.50 a litre for diesel and R1 a litre for petrol until January 5, 2027.
Roodt said earlier increases continued to put pressure on costs, limiting the scope for savings to filter through to customers.
He warned that businesses faced risks beyond the eventual withdrawal of the relief. With oil prices rising again, he expected further increases in diesel and petrol prices.
Those increases would add to inflationary pressure, Roodt said. He also forecast that the South African Reserve Bank would raise interest rates again, with negative consequences for economic growth.
The levy measures will cost an estimated R10 billion in foregone revenue. To fund the intervention, R10bn previously transferred to the Central Energy Fund will be returned to the National Revenue Fund and allocated to the contingency reserve.
The intervention follows an earlier round of temporary fuel levy relief introduced between April and June after oil prices surged amid conflict in the Middle East.
