New data from the Central Energy Fund (CEF) shows a positive trend for fuel price recoveries for South Africa, though it still won’t be enough to offset a considerable price hike next month.
The CEF’s latest report for the end of the second full week of April shows that fuel price under-recoveries are trending downward, resulting in a lower increase than previously anticipated.
This pattern has held true for all of April, as petrol was initially expected to go up by between R4.29 and R4.69 per litre.
By the end of the first full week of April, the CEF’s prediction dropped to between R3.25 and R3.63 per litre.
Its most recent data now shows an under-recovery for petrol of between R2.29 and R2.63, marking a 67% reduction in the expected price increase.
Diesel has thankfully seen a similar improvement, as it was initially set to receive a record-breaking hike of R17.57 per litre for diesel 0.005%.
Now, the fuel is projected to go up by R8.05 per litre which, while still enormous, is 54% less than previously anticipated.
These are the new projected fuel price adjustments for petrol and diesel:
- Petrol 93 – increase of R2.29 per litre
- Petrol 95 – increase of R2.63 per litre
- Diesel 0.05% (wholesale) – increase of R8.06 per litre
- Diesel 0.005% (wholesale) – increase of R8.07 per litre
While these prices are an improvement over the previous estimates, the situation is still highly dependent on the war in the Middle East.
The global oil price is the biggest contributor to the under-recovery, accounting for 95% of the increase.
The ceasefire between Iran and the United States is still in effect, but is set to expire this Wednesday, 22 April 2026.
However, tensions rose over the weekend when the US seized an Iranian-flagged cargo vessel that tried to pass its blockade and sail to an Iranian port near the Strait of Hormuz, according to Sky News.
Iran has rejected a second round of talks with the US, despite US President Donald Trump claiming that talks would be held in Pakistan today (Monday, 20 April).
Trump has renewed his threats to “knock out” Iran’s power plants and bridges, and Iran said it would retaliate over the seizure of its ship in the strait.
Even if the fighting does not resume, Investec Chief Economist Annabel Bishop warned that production in the region is constrained as infrastructure has been damaged and supply routes are still impeded.
Consequently, oil prices are recovering at a snail’s pace.
The silver lining is that there are still two weeks to go until the official fuel price adjustments are made on the first Wednesday of May, meaning there is time for prices to recover even further.
Additionally, the South African government is expected to announce new fuel price relief measures to replace the temporary R3 reduction in the General Fuel Levy (GFL), which was implemented at the start of April.
South Africa has some breathing room
According to Citigroup Inc, South Africa has enough fiscal space to extend a fuel-tax cut by two months to soften the blow to motorists.
However, these relief measures would likely cost the state between R10 billion and R12 billion, said the bank’s country economist, Gina Schoeman.
“We can see a staggered reduction of the fuel price levy for at least another month, if not another two,” said Schoeman.
She added that this is feasible in terms of fiscal space, citing prudent spending, an expected revenue windfall from mining taxes, and the National Treasury’s ability to tap contingency reserves.
The treasury stated it would forgo R6 billion in revenue because of the measure, offsetting the shortfall within the fiscal framework approved in the 2026 budget.
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