South African motorists are set to benefit from a drop in fuel prices next week, despite a planned hike to the General Fuel Levy. This comes as month-end data from the Central Energy Fund (CEF) reveals a significant over-recovery in current petrol and diesel prices.
Finance Minister Enoch Godongwana announced the tax adjustments during the 2025 national budget speech on 21 May. These adjustments include increases to the General Fuel Levy, marking the first such rise in three years.
From 4 June 2025, the levy will rise to R4.01c/l for petrol and R3.85c/l for diesel. The Road Accident Fund levy remains unchanged at R2.18, while the carbon fuel tax stays consistent with a previously implemented 3c/l hike.
CEF Data Confirms Fuel Price Drop Incoming
Despite the tax changes, the latest CEF projections offer welcome relief. A month-end over-recovery has pushed expected fuel price cuts to 20c/l for both grades of petrol and a whopping 52c/l for diesel. Illuminating paraffin is also expected to decrease by 56c/l.
Once the levy increases are factored in, the expected price adjustments are still favourable:
- Petrol 93 & 95: Decrease of 4 cents per litre
- Diesel 0.05% & 0.005% (wholesale): Decrease of 37 cents per litre
These reductions suggest that the fuel tax hike will be absorbed by the over-recovery, keeping overall prices down. Importantly, the carbon fuel tax’s latest hike was already applied in April and will not add further cost in June.
Fuel Relief Eases Inflation, Supports Economic Stability
The South African Reserve Bank (SARB) stated on 29 May that the ongoing drop in fuel prices has helped lower inflation to below the targeted range. This economic relief has given the central bank the confidence to reduce interest rates by 25 basis points this week.
The fuel price cut is attributed to two main global trends: a stronger rand trading below R18.00 to the US dollar, and a continued decline in global oil prices—down 15% since January.
While the rand has remained strong against the dollar, it has weakened against other major currencies. Globally, oil prices are fluctuating due to trade disruptions and looming oversupply concerns, creating price instability.
Despite this volatility, diesel is benefiting more from global oil trends, while petrol sees a minor under-recovery. However, the overall balance still points to price reductions at the pump.
Final Adjustments Expected by 4 June
The Department of Petroleum and Mineral Resources will confirm the official fuel price changes before 4 June. If no further slate levy adjustments occur, South Africans can look forward to some financial breathing room on their next refuel.
Even small reductions can ease the cost-of-living crisis and maintain downward pressure on inflation—making this update good news for petrol prices next week.