Fuel cuts on the cards, but tax changes may soften the savings
According to data released by the Central Energy Fund (CEF) fuel price recoveries have improved substantially.
South African motorists could soon receive welcome relief at the pumps, with petrol and diesel prices expected to decrease significantly after months of rising fuel costs and pressure on household budgets.
The anticipated reduction follows the signing of a memorandum of understanding between the United States and Iran aimed at ending their conflict in the Middle East, a development that has eased concerns over global oil supplies and the potential closure of the Strait of Hormuz.
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South Africa has felt the impact of the conflict acutely, with higher fuel prices placing strain on motorists, businesses, airlines and the taxi industry.
According to data released by the Central Energy Fund (CEF) at the end of the third week of June, fuel price recoveries have improved substantially.
The figures show petrol is currently over-recovered by R2.94 per litre, while diesel has recorded even larger over-recoveries. Diesel with a sulphur content of 0.05% is over-recovered by R4.57 per litre, while 0.005% diesel is over-recovered by R4.97 per litre.
Illuminating paraffin has also moved into positive territory, with an over-recovery of R5.13 per litre.
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If current trends continue, motorists could see the following fuel price adjustments in July:
- 93 octane petrol: decrease of R2.94 per litre
- 95 octane petrol: decrease of R2.90 per litre
- 0.05% diesel: decrease of R4.57 per litre
- 0.005% diesel: decrease of R4.97 per litre
- Illuminating paraffin: decrease of R5.13 per litre
However, the expected reductions may be partially offset by the phased return of the fuel levy.
The temporary fuel tax relief introduced in April is set to be reduced from July, with motorists expected to pay an additional R1.50 per litre on petrol and R1.96 per litre on diesel.
While the improved recoveries point to substantial decreases in fuel prices, the reintroduction of part of the levy is likely to reduce the overall savings motorists experience at the pumps.
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Meanwhile, global oil prices have fallen sharply following reports of the US-Iran agreement aimed at restoring normal shipping through the Strait of Hormuz, a key route that handles about a quarter of the world’s seaborne oil trade.
According to Bloomberg, analysts believe oil prices are unlikely to return to pre-conflict levels immediately, as global crude oil and fuel stockpiles will need time to recover. Experts expect this process could take until the end of 2026.
The Department of Mineral Resources and Energy is expected to announce the official fuel price adjustments at the end of the month, with changes taking effect in early July.
