Good news about petrol prices in South Africa
After four months of consecutive hikes at the pumps, motorists are likely to see much-needed relief at the pumps in July, with a solid over-recovery building for petrol and diesel prices in South Africa.
Data from the Central Energy Fund for the end of the second week in June shows that both petrol and diesel are carrying over-recoveries large enough to absorb looming tax hikes.
From 1 July 2026, the National Treasury will be terminating the fuel levy relief provided to motorists in April.
The fuel levy relief saw R3.00 per litre cut from the petrol and diesel price in April to cushion motorists from the shocks of the Iran War, which sent fuel prices skyrocketing.
The relief was extended to May, where the relief for diesel was boosted to the full levy (R3.93 per litre). However, the Treasury made it clear that the levy would be added back in June and July.
In June, half the levy was added back, which turned what would have been a small petrol price cut that month into another hike. Diesel prices still came down, however.
For July, the full levy will be back in the prices. Fortunately, the over-recoveries are so high that prices are likely to still come down.
This comes with the caveat that recoveries are slowly declining and may be lower by month-end.
The CEF’s daily snapshots also do not account for any adjustments to the slate levy that might impact final pricing.
Nevertheless, fuel price recoveries are squarely on the front foot at this stage.
These are the recoveries at the end of week 2 in June:
- Petrol 93: decrease of R2.54 per litre
- Petrol 95: decrease of R2.52 per litre
- Diesel 0.05% (wholesale): decrease of R4.28 per litre
- Diesel 0.005% (wholesale): decrease of R4.57 per litre
- Illuminating paraffin: decrease of R4.88 per litre
The CEF does not provide daily snapshot data for LP Gas, so it is not currently possible to provide an expected price for the coming month.
| July projections | Recoveries Week 1 | Fuel tax added in July | Projected change |
|---|---|---|---|
| Petrol 93 | R2.54 | (R1.50) | R1.04 |
| Petrol 95 | R2.52 | (R1.50) | R1.02 |
| Diesel 0.05% | R4.28 | (R1.96) | R2.32 |
| Diesel 0.005% | R4.57 | (R1.96) | R2.61 |
Note: the above only considers the fuel levy being added back in July, as well as the current recovery data. It does not consider changes to the slate levy, which may also affect final pricing.
The recovery trajectory has been supported by a resilient rand as well as declining global oil prices.
The rand is currently trading around R16.25 to the dollar, the stronger side of its relatively narrow range over the past month.
The rand has been boosted by positive sentiment locally and a stronger commodity market, as well as growing risk appetite on news that the United States and Iran are close to signing a deal.
The same news has helped oil markets, with the oil price falling below $90 a barrel, currently trading at $86.
This decline came after Iran’s semi-official Mehr News Agency published a 14-point draft deal it said was under discussion with the US.
The draft includes a possible reopening of the Strait of Hormuz within 30 days under Iranian arrangements and the lifting of oil sanctions.
That text still requires approval by Iranian authorities, the report said.
On Thursday, President Donald Trump said a peace deal with Iran could be signed as soon as the weekend, calling off previously announced strikes on the country.
However, this is not the first time markets have reacted with optimism to the prospect of an end to the conflict, only for hopes to be dashed by a failure to reach an agreement.
Trump has previously insisted an agreement with Iran was within reach several times, but none has yet materialised. As ever, markets remain hopeful, but cautious.
Projected price for Petrol 95 (for July)
Projected price for Diesel 0.005% (for July)
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