Motorists across the country are being warned to prepare for a fresh wave of fuel price adjustments as the general fuel levy (GFL) kicks in this June. While many were hoping for some relief at the pumps, it appears that any decrease in fuel prices could be wiped out by Treasury’s inflation-linked tax adjustments.
Modest Fuel Relief Could Be Undermined
As of Wednesday, 4 June, South Africans will begin to feel the pinch as the new fuel levy adjustments come into effect. Petrol prices will climb by 16 cents per litre, pushing the general fuel tax burden up to R4.01. Diesel isn’t spared either, with a 15-cent increase taking its fuel levy to R3.85 per litre.
While recent data from the Central Energy Fund (CEF) indicated the possibility of over-recoveries — suggesting price cuts of up to 49 cents for diesel and around 20 cents for petrol — the levy increases are expected to severely narrow the potential savings.
What This Means for Drivers in June
The CEF’s latest fuel price forecasts show that, before the tax increase is applied, the following decreases were likely:
- Petrol 93: Down by 20 cents per litre
- Petrol 95: Down by 19 cents per litre
- Diesel 0.05% (wholesale): Down by 48 cents per litre
- Diesel 0.005% (wholesale): Down by 49 cents per litre
- Illuminating paraffin: Down by 52 cents per litre
However, when the additional fuel levy is included, the outlook becomes less optimistic:
- Petrol 93: Net decrease of 4 cents per litre
- Petrol 95: Net decrease of 3 cents per litre
- Diesel 0.05% (wholesale): Net decrease of 33 cents per litre
- Diesel 0.005% (wholesale): Net decrease of 34 cents per litre
These figures reveal how the fuel levy cuts into potential savings, especially for petrol users who were hoping for more meaningful relief.
Why the Fuel Levy Is Increasing
Finance Minister Enoch Godongwana announced the inflation-based fuel levy hike during his third Budget Speech. The increase forms part of the government’s broader plan to stabilise the country’s financial position for the 2025/26 fiscal year. With Treasury facing a staggering R61.9 billion shortfall over the next three years — made worse by the shelving of a proposed 1% VAT increase — fuel taxes have now become a critical revenue tool.
Frank Blackmore, chief economist at KPMG South Africa, noted that the adjustment represents an inflationary hike of roughly 4%, a steeper increase compared to the now-abandoned VAT proposal.
What It Means for Households
The fuel levy is now one of the largest components of the fuel price structure. The total tax per litre of petrol now stands at R6.37, made up of the following:
- General Fuel Levy: R4.01
- Road Accident Fund Levy: R2.18 (unchanged)
- Carbon Tax: 14 cents
- Customs & Excise Duties: 4 cents
With these costs baked into every litre purchased, even a minor dip in oil prices or recovery in the rand may offer little visible relief at the pumps.
Pump Prices Going into June
After May’s slight reprieve, fuel prices were sitting at:
- Petrol 93: R21.29 per litre
- Petrol 95: R21.40 per litre
- Diesel 0.05%: R18.93 per litre (wholesale)
- Diesel 0.005%: R18.91 per litre (wholesale)
As the June price adjustment looms, these figures are expected to shift, with only diesel users likely to experience a noticeable reduction — and only if the global oil market and exchange rates remain stable.
Tougher Days Ahead for Commuters
With the new month approaching and the fuel levy about to take effect, the outlook is less than promising for the average motorist. Should global oil prices increase or the rand lose further ground, even the modest reductions currently predicted could be replaced by fresh hikes.
South Africans are being urged to budget cautiously, as the road ahead looks set to be anything but smooth.
Related article: Fuel Price Increase: Budget 3.0 Brings First Levy Increase in 3 Years
