The fuel crisis in the Middle East has continued to deteriorate this week, as South Africans are now facing petrol hikes of up to R6 per litre next month.
At the end of the third week of March, data from the Central Energy Fund indicated that petrol prices would go up by R4.94 per litre in April.
However, BizNews’s Alec Hogg is now warning that motorists are facing a R6 per litre increase in April with an additional R3 per litre hike potentially on the cards for May.
“The average under-recovery at the moment is R5.62 a litre. Then you add to that the fuel price levy, so you’re going to talk about, as things stand, around R6 a litre,” he said.
However, Hogg noted that the total under-recovery for petrol is currently at R9 per litre, meaning that motorists will effectively be subsidized by R3 per litre in April.
“That means that the following month, all other things being equal with no changes in the oil price or the rand, it would mean that another R3 a litre comes up in May,” he said.
Petrol 95 is retailing for R20.30 per litre as of March 2026, so a R6 hike would translate to a price of R26.30 per litre in April.
If Hogg’s prediction holds true, prices will surge to around R29.30 per litre in May.
Unfortunately, the outlook for diesel is even worse.
“As far as diesel is concerned, the picture is even worse next week. Diesel’s going up R9.37 per litre. That’s almost 50%, and that’s the average for the month so far.”
He said that the total under-recovery for diesel is now pegged at R16.33 per litre.
As a result, the wholesale price of diesel 50ppm is expected to skyrocket from R18.60 to R27.97 per litre, which will be even higher once the retail markup is included.
The additional under-recoveries Hogg is referring to are because South Africa only adjusts its fuel prices once per month.
The official adjustments are based on the average international petroleum price and the dollar-to-rand exchange rate.
However, these adjustments do not account for the fact that fuel stations have been selling petrol and diesel at prices divorced from the actual cost of the fuel procured.
Consequently, the government uses a Slate Account to make up the difference, retroactively compensating oil and petroleum suppliers for revenue lost when they sell their products at a discount over a certain period.
Motorists pay for this in the form of a Slate Levy imposed on petrol and diesel sales. The charge is only applied for the second month after a significant over- or under-recovery in fuel prices for the preceding period under review.
Because the price of oil has been so volatile this past month, the massive under-recovery will only reflect in May’s fuel price adjustments. Right now, the Slate Levy is sitting at 0c per litre.
Right now, the Slate Account is sitting at a relative low of R5.9 billion. If the oil price continues on its current trajectory, it will enter a negative balance, necessitating the reinstatement of the Slate Levy.
Growing pressure to stop fuel tax increases
The Congress of South African Trade Unions (Cosatu) is the latest group to call on the government to halt its plan to raise fuel taxes next month.
During the 2026 Budget Speech, Finance Minister Enoch Godongwana announced that the General Fuel Levy, Road Accident Fund Levy, and Carbon Levy will all be raised this April in line with inflation.
In light of next month’s expected fuel price hikes, citizens and civil organizations are demanding that the government intervene to provide economic relief for households and businesses.
Cosatu urged the government to delay the fuel tax increases and implement measures to mitigate the petrol and diesel to prevent a “national disaster.”
The trade union’s parliamentary coordinator, Matthew Parks, warned that many South Africans already spend upwards of 40% of their salary on commuting.
He pointed out that the fuel levy increases were announced before the war in Iran broke out and that the government should reconsider its actions.
“That’s something the government can control,” Parks said. “It’s something which is quite easy to do administratively, and there is a contingency reserve of about R32 billion in the budget for disasters.”
“We already have slow economic growth, high unemployment, and the cost of living is already so difficult for most people to survive,” Parks said.
“Most people spend 40% of their salary just to get to work, and to increase that to 60%, that’s just going to be a blow we can’t sustain.”
Loading ...
