Energy

Great news for petrol prices in South Africa next week

Staff Writer

 ·26 Jun 2026

Month-end data from the Central Energy Fund (CEF) shows that South African motorists are in store for significant cuts at the pumps next week, even with the full fuel levy being added back into prices.

The positive news is thanks to a much lower global oil price, which has retreated close to pre-Iran war levels following the United States and Iran moving to end hostilities in the region.

The rand has also remained resilient, boosting over-recoveries in prices.

According to the CEF’s data for the last week in June, petrol prices show an over-recovery of R3.07 per litre, while diesel recoveries are higher, between R4.68 and R5.12 per litre.

This is around 50 cents per litre higher than at mid-month.

• Petrol 93: decrease of R3.07 per litre
• Petrol 95: decrease of R3.03 per litre
• Diesel 0.05% (wholesale): decrease of R4.68 per litre
• Diesel 0.005% (wholesale): decrease of R5.12 per litre
• Illuminating paraffin: decrease of R5.24 per litre

Typically, over-recoveries at these levels would put huge price cuts on the cards for motorists; however, the end of the National Treasury’s fuel levy relief will offset this.

After adding half of the fuel levy relief back into prices in June, the relief will fully terminate in July.

This will see R1.50 per litre be added back into petrol prices next month, with diesel prices having R1.96 per litre reintroduced.

However, even with the levies being added back, the fuel recoveries remain positive—meaning a cut at the pumps is all but guaranteed for July.

The table below outlines how the July fuel prices could be impacted by their return.

Note: The above only considers the month-end recoveries and the termination of the general fuel levy relief, and does not factor in other possible adjustments, such as the slate levy.

Turning point for markets

The main contributor to the large over-recoveries is the oil price, which accounts for between R3 and R5 per litre of the positive swing.

The rand/dollar exchange, by comparison, is only boosting recoveries by between 11 and 14 cents per litre.

Oil prices have declined sharply after transits through the Strait of Hormuz accelerated.

Ships have been openly transiting the waterway following early progress toward a lasting agreement to end the US-Iran war, adding millions of barrels to the global market.

Further talks between Washington and Tehran are likely to be protracted over issues including nuclear policy, but oil futures have recently declined rapidly and are on track for a third weekly loss.

Markets have responded positively to the news, with oil falling to around $74 a barrel, down from $85 a barrel around mid-month, and falling even further from the $100+ per barrel in recent months.

However, the risk premium has not fallen away entirely, with an attack on a cargo ship renewing concerns about safe passage through the vital waterway.

A White House official said it was too soon to say who carried out the strike on the vessel. There were reportedly no deaths or environmental damage, and it continued sailing.

Nevertheless, the attack has rattled the fragile confidence of shipowners and crews—though ships continued to transit through the narrow corridor on Friday. 

The rand, meanwhile, has been fairly stable, trading in a narrow range around R16.50 to the dollar this week.

It recently strengthened close to the R16/$ level, but has been pushed back by a firmer dollar and subdued global risk appetite.

“For now, global sentiment remains the dominant driver of USD/ZAR, but local structural risks continue to limit the rand’s upside,” said Andre Cilliers, currency strategist at TreasuryONE.

Data on Thursday showed that South Africa’s producer inflation quickened to 7.8% year-on-year in May from 4.8% in April, exceeding Reuters economists’ expectations of 6.7%.

Local markets are watching the inflation outlook and its impact on interest rates in South Africa and the United States, with sticky inflation a concern for both.