- Botswana and Zambia have restored fuel taxes after suspending levies earlier in 2026, while South Africa continues to provide relief through a ZAR10 billion ($610 million) fuel-levy reduction.
- Governments across Africa face growing pressure to balance consumer protection, rising fuel costs and declining tax revenues.
Several African governments are reversing fuel-tax reductions introduced earlier in 2026 as elevated oil prices and fiscal pressures force them to reconsider temporary relief measures.
Botswana has restored fuel levies suspended in April, while Zambia has reinstated excise duty and plans to end its value-added tax (VAT) exemption on fuel in December. South Africa, meanwhile, has committed ZAR10 billion ($610 million) to reduce fuel levies, joining Ghana and Kenya in maintaining temporary measures to cushion consumers against higher prices.
The developments reflect differing government responses to the oil price shock triggered by the Middle East conflict.
South Africa Maintains Fuel Tax Relief
South Africa introduced a ZAR3-per-litre reduction in the general fuel levy on diesel and ZAR1.50 on petrol from November 4.
Finance Minister Enoch Godongwana announced the measure as part of the government’s medium-term budget. The relief will run in phases, with a reduced benefit continuing until January 5, 2027.
The government is financing the ZAR10 billion intervention through funds previously transferred to the state-owned Central Energy Fund. However, higher international fuel prices, a weaker rand and increased levies have offset much of the benefit for motorists. Ghana has also suspended its GHS1-per-litre Energy Sector Shortfall and Debt Repayment Levy on diesel for October and November.
Kenya extended its reduced eight per cent VAT rate on petrol, diesel and kerosene for another 90 days. The rate remains half the standard 16 per cent. Despite these interventions, consumers in both countries continue to face higher fuel and transport costs.
Botswana and Zambia Restore Fuel Taxes
Botswana reinstated its fuel levy, road fund levy and security-of-supply margin on October 8, ending a six-month suspension.
The government had previously suspended the charges at a cost of approximately BWP2.45 per litre on petrol and BWP2.39 on diesel.
The Botswana Energy Regulatory Authority subsequently increased petrol and diesel prices, citing higher import costs.
Zambia also restored excise duty on fuel in October after suspending the tax in April. The reinstatement contributed to a 24 per cent increase in petrol prices, while the Energy Regulation Board introduced further price adjustments in November.
The country will also end its VAT zero-rating on petrol and diesel on December 1.
Mozambique Proposes Higher Fuel Levies
Mozambique is considering an increase in its fuel levy to $0.15 per litre. Transport and Logistics Minister João Matlombe told parliament that the proposal would increase the Road Fund’s share of levy receipts from 40 per cent to 90 per cent.
The proposed changes could raise annual road-related levy revenue to MZN20.86 billion, equivalent to approximately $326 million.
However, the proposal still requires parliamentary approval. Meanwhile, the government plans to provide monthly payments to minibus operators for three months to prevent transport fares from increasing.
IMF Warns Against Broad Fuel Subsidies
The International Monetary Fund (IMF) has warned African governments against relying heavily on broad fuel subsidies and tax reductions.
Its October 15 regional economic outlook update found that only about one in seven fuel-relief measures announced across the region targeted specific groups.
The IMF estimated that general fuel-price support could cost approximately four per cent of GDP, compared with no more than 0.5 per cent for transfers targeting the poorest 40 per cent of households.
The Fund urged governments to make relief measures temporary, budgeted and targeted, with clear exit plans. Nigeria represents a different approach following the removal of its petrol subsidy in 2023.
The country largely relies on market-based fuel pricing, although the federal government has maintained a VAT waiver on petroleum products. A proposed five per cent fossil-fuel surcharge under the 2025 tax law has not been activated.
Across the continent, governments continue to balance the need to protect consumers against rising fuel costs with pressure to restore public revenue.