South Africa is likely to be hit with another round of substantial fuel price hikes in May 2026.
The latest data from the Central Energy Fund (CEF) for the first full week of April shows that both petrol and diesel are facing a significant under-recovery.
Petrol is currently looking at an under-recovery of between R3.25 and R3.63 per litre, while diesel shows a massive under-recovery of between R10.80 and R10.84 per litre.
While these increases are concerning, the silver lining is that they are lower than the CEF’s earlier projections.
At the start of the month, the CEF indicated that petrol would go up by R8 per litre, while diesel would experience an unprecedented R17 per litre hike.
These projections have thankfully come down over the last week due to the improving situation in the Middle East.
Global oil prices skyrocketed when the United States and Israel launched coordinated strikes on Iran at the end of February, causing the Islamic Republic to retaliate and plunging the region into a sustained conflict.
However, the US and Iran agreed to a two-week ceasefire on 8 April and are currently in negotiation, though as of Sunday 12 April, the two parties have failed to come to an agreement.
Right now, the CEF projects that the following fuel price adjustments will take effect in May 2026:
- Petrol 93 – Increase of R3.25 per litre
- Petrol 95 – Increase of R3.63 per litre
- Diesel 0.05% (wholesale) – Increase of R10.80 per litre
- Diesel 0.005% (wholesale) – Increase of R10.84 per litre
While these projections are an improvement from early April, South African motorists are still a ways off from seeing an over-recovery in fuel prices.
According to Aluma Capital Chief Economist, Frederick Mitchell, while the situation in the Middle East has improved, motorists will still be negatively impacted next month.
This is because the market disruptions from the Iran war are already baked into May’s fuel prices.
This means that, despite the ceasefire, next month’s fuel price adjustments are unlikely to swing into an over-recovery.
All of this is also predicated on the ceasefire, which is on shaky ground.
Several economists and political analysts have cautioned that the drop in global oil prices will only last so long as the ceasefire holds.
If the fighting resumes, the market is likely to deteriorate again.
Tensions between the US and Iran are already running high due to Israel’s attacks on Lebanon.
On the day the ceasefire was announced (8 April), the price of Brent crude oil dropped to $94 per barrel, but this has already gone up to $104 per barrel as of Monday 13 April.
Fuel taxes for South Africa
The international oil price is not the only reason South Africa is expected to receive significant fuel price hikes next month, as the General Fuel Levy (GFL) could be re-implemented.
The day before April’s fuel price adjustments took effect, the government announced a relief measure for motorists in the form of a reduction in the GFL of R3 per litre.
As a result, petrol prices rose by R3 per litre instead of R6, and diesel by R7 instead of R10.
However, this reduction is temporary and applies only from 1 April to 5 May 2026. The government has thus far made no indication that the relief will be extended into May.
Mitchell argued that this will be the “real test,” as adding R3 back to the GFL would, at this stage, double the projected petrol price increase.
“Even with the global reprieve, the reinstatement of this tax remains a significant hurdle for inflation management,” he said.
The National Treasury has not explained how the tax will be added back. However, it was explicitly stated that the relief would only last this month.
The silver lining is that the National Treasury and the Department of Mineral and Petroleum Resources are expected to announce new relief measures for May and June.
However, these are expected to be longer-term interventions rather than a form of immediate relief.
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