South Africa is on track for an appreciable reduction in the price of petrol and diesel next week.
This is based on the new month-end data from the Central Energy Fund (CEF), which indicates that both fuel types will experience a significant over-recovery in July.
This positive development can be traced to the stabilising situation in the Middle East, as the United States and Iran have signed a memorandum of understanding to de-escalate tensions.
This has caused global oil prices to plummet to levels close to what they were before the war began.
At the same time, the rand has largely maintained its value against the US dollar, helping to lower the cost of importing petroleum products.
According to the CEF’s latest reports, petrol is now on track for an over-recovery of between R3.03 and R3.07 per litre.
Diesel, meanwhile, is looking at an even better over-recovery of between R4.68 and R5.12 per litre.
This is a notable improvement over the CEF’s estimates from the beginning of the month, which pegged petrol at a R2.68 per litre reduction.
These are the CEF’s fuel price adjustment predictions at the end of the fourth week of June:
- Petrol 93 – decrease of R3.07 per litre
- Petrol 95 – decrease of R3.03 per litre
- Diesel 0.05% (wholesale) – decrease of R4.68 per litre
- Diesel 0.005% (wholesale) – decrease of R5.12 per litre
Note that the above figures do not account for any adjustments to the Slate Levy, which may affect the final fuel price.
This late in the month, the CEF’s predictions should closely resemble the official fuel price adjustments that the Department of Mineral and Petroleum Resources will make on Wednesday, 1 July 2026, barring any unforeseen geopolitical upsets.
The oil price is the main driver of the over-recoveries, accounting for R3 to R5 of the price cut for petrol and diesel, respectively.
In contrast, the rand/dollar exchange rate is only boosting the recoveries by 11 to 14 cents per litre.
Oil prices have dropped from around $85 to $74 per barrel due to the reopening of the Strait of Hormuz, allowing shipments to freely traverse the waterway for the first time in months.
As a result, millions of barrels of oil have been added to the global supply. While the US and Iran are still in talks, market analysts predict that oil prices will continue to decline into next week.
However, there are concerns that the war may flare up again, largely because Israel and Lebanon are still in conflict.
As for the rand, it has traded in a narrow range over the last month, holding around R16.50 per USD.
More than enough to offset fuel taxes
It’s not all good news, unfortunately, as the substantial over-recoveries will be partially undermined by the return of the General Fuel Levy (GFL).
The National Treasury intends to restore the full GFL in July, after previously cutting the fuel tax by R3 per litre in April.
Half of this amount was added back in June, and the remaining half will be reintroduced next week, adding R1.50 to the petrol price and R1.96 to the diesel price.
Thankfully, the over-recoveries are much higher than this, which means motorists will still see a price cut at the pumps next Wednesday, even if it’s not as much as the CEF’s data indicates.
The following table shows how fuel prices will be affected in July once the General Fuel Levy is factored in:
| June predictions | Recoveries at end of 2nd week of June | Fuel tax added back in July | Final projected change |
|---|---|---|---|
| Petrol 93 | – R3.07 | + R1.50 | – R1.57 |
| Petrol 95 | – R3.02 | + R1.50 | – R1.52 |
| Diesel 0.05% | – R4.68 | + R1.96 | – R2.72 |
| Diesel 0.005% | – R5.12 | + R1.96 | – R3.16 |
Loading ...
