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The petrol price in South Africa may have skyrocketed to a record R28.06 per litre (for inland 95 unleaded) since tensions flared between Israel, the US and Iran. But the government believes its reduction in the general fuel levy will actively cushion South Africans against even steeper hikes and shield the economy from broader inflationary pressures.
Image credit: Husskeyy, CC BY-SA 4.0, via Wikimedia Commons
The intervention comes alongside an announcement by the Department of Mineral and Petroleum Resources (DMPR) regarding price adjustments.
“In line with the announcement by the Minister of Finance, the amount of general fuel levy relief has accordingly been reduced by R1.50 per litre for petrol and R1.96 per litre for diesel, effective from (3 June 2026) to Tuesday, 30 June 2026,” the DMPR said in a statement.
Blows to the fiscus
During remarks at the CITI Emerging Markets Macro and Credit Conference, National Treasury director-general Dr Duncan Pieterse noted that between April and June, the temporary reduction in the general fuel levy came at a cost of some R17.2bn to the fiscus.
“This will be funded by the fiscal outperformance from the previous year and will therefore be fiscally neutral.
“We set a precedent for this when we cut the fuel levy from April to August 2022, after Russia invaded Ukraine: the revenue foregone was well below the relief provided.
“We have made it clear that any additional relief measures, including those contemplated by other government departments, will be managed within existing budgets,” Pieterse said.
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Relief for low-income households
The price adjustments for this month are as follows:
- Petrol 93 (ULP and LRP): R1.43 increase.
- Petrol 95 (ULP and LRP): R1.43 increase.
- Diesel (0.05% sulphur): R3.24 decrease.
- Diesel (0.005% sulphur): R2.61 decrease.
- Illuminating paraffin (wholesale): R5.96 decrease.
- Single maximum national retail price for illuminating paraffin: R7.95 decrease.
- Maximum retail price of LP gas: 17c per kg decrease and 20c per kg decrease in the Western Cape.
The general fuel levy reduction may apply specifically to petrol and diesel.
Still, the sharp decrease in the prices of paraffin and gas also provides relief for low-income households that use alternative fuels for heating, lighting and cooking.
“The prices of middle distillates (diesel and paraffin) decreased more than petrol prices because of lower seasonal demand as the northern hemisphere moves into summer.
“These factors led to lower contributions to the basic fuel prices of petrol, diesel and illuminating paraffin by 30.42 cents per litre, R5.42 per litre and R5.82 per litre, respectively.
“The prices of Propane and Butane (LP Gas) remained the same during the period under review; however, the freight costs decreased,” the DMPR explained.