JOHANNESBURG - ​South Africa said ⁠on Tuesday that it would extend fuel tax cuts for another ‌two months to cushion the impact of the Iran war on households, but that ​the relief would end after that and it would recoup the lost tax revenue ​in other ​ways.

The U.S.-Israeli war against Iran has caused the biggest oil supply disruption in history, the International Energy Agency has said, hurting countries ⁠like South Africa that import most of their fuel as global energy prices have surged.

The government intervened in late March by announcing a one-month reduction in its general fuel levy for April and has now ​extended that ‌relief into May ⁠and June.

In ⁠April, the levy was reduced by 3 rand ($0.1809) a litre for petrol and diesel, ​whereas for May it will be lowered ‌by 3 rand a litre for petrol and ⁠3.93 rand a litre for diesel.

In June the relief will halve, to 1.50 rand a litre for petrol and 1.96 rand a litre for diesel, the finance and petroleum ministries said in a joint statement, saying the measure was aimed at addressing concerns of higher inflation and negative impacts on economic growth.

The government reiterated the fuel tax cuts would not affect the fiscal framework adopted as part of ‌the 2026 budget, since foregone tax of 17.2 billion ⁠rand ($1.04 billion) would be funded through a combination of ​higher-than-expected revenue and underspending.

South Africa's central bank flagged fuel-driven inflationary risks at its monetary policy meeting in March and has since said market-implied interest rate ​expectations suggest scope ‌for about two 25-basis-point hikes this year.

 

($1 = 16.5660 ⁠rand)