The Government has approved a review of selected and time-bound fuel taxes as part of a broader strategy to cushion motorists and businesses from rising global oil prices, Cabinet has announced.
The move comes as authorities intensify efforts to stabilise fuel costs while ensuring adequate supply, amid mounting pressure from international market volatility.
Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, confirmed that Government has already begun adjusting taxes and levies to contain price increases, particularly on diesel.
He said recent interventions prevented a sharper spike in diesel prices, which could have reached US$2.20 per litre, but were instead capped at US$2.05 following the application of a levy reduction strategy.
Professor Ncube indicated that Government will continue fine-tuning fuel-related charges, including import duties and carbon taxes, as part of an ongoing price containment framework.
“This is work in progress, and we will be making announcements in the fullness of time on further adjustments to these taxes,” he said, adding that authorities are closely monitoring global market trends before implementing additional measures.
Beyond tax interventions, Government is also pursuing alternative cost-reduction strategies, including increasing ethanol blending levels in petrol from E5 to E20.
The minister noted that raising ethanol content could lower fuel prices by approximately US$0.18 to US$0.19 per litre, providing further relief to consumers.
“We believe that increasing blending from 5% to 20% could significantly reduce the price,” he said.
Authorities are also prioritising fuel availability, with Government engaging suppliers to guarantee consistent supply over the coming months.
Professor Ncube said ensuring steady fuel supplies remains critical, alongside managing prices.
“At least for the next three months or so, we have adequate supply, but we are also dealing with the price at the same time,” he said.
The latest measures underscore Government’s dual approach of using fiscal tools and energy policy adjustments to navigate rising fuel costs, which have been driven in part by geopolitical tensions affecting global oil markets.
Economic analysts say while tax reviews and ethanol blending may provide short-term relief, sustained stability will depend on global price trends and the country’s ability to enhance local energy alternatives.
