By Lehlohonolo Lehana.
Finance Minister Enoch Godongwana has extended the fuel levy relief against soaring global oil prices, driven by the ongoing conflict in the Middle East.
The latest data from the Central Energy Fund, showing month-end projections, points to an under-recovery of between R1.77 and R2.09 per litre for petrol.
Diesel is showing a steeper under-recovery of around R5.42 per litre.
These month-end projections are a far stretch from the severe under-recoveries at the start of the period, where hikes were seen as high as R8 per litre and R17 per litre for petrol and diesel, respectively.
In March, government reduced the general fuel levy by R3 a litre to cushion consumers against soaring global oil prices.
In a statement, Treasury said the Minister of Finance proposes that the R3 per litre reduction in the general fuel levy for petrol is extended until Tuesday 2 June 2026. Given the large expected increases in the price of diesel.
Godongwana has decided that the temporary relief for diesel be increased by 93c to R3.93 a litre, reducing the levy to zero, from May 6 to June 2.
For the month of June, the Minister proposes that the level of relief is halved to phase out the relief before July. As a result, the amount of relief from the general fuel levy will be reduced to R1.50 a litre for petrol and R1.96 a litre for diesel, effective from June 3 to June 30.
This will increase the general fuel levy for petrol from R1.10 a litre to R2.60 a litre and increase the general fuel levy for diesel from R0 a litre to R1.97 a litre for June.
From July 1, the general fuel levy for petrol will return to R4.10 a litre and the general fuel levy for diesel to R3.93 a litre.
Treasury and the Department of Minerals, Petroleum and Resources (DMPR) pointed out that the estimated cost of the temporary fuel levy relief from April to June 2026 is R17.2-billion in foregone tax revenue.
Godongwana said, government is exploring every option to soften the knock-on effects on consumers and key sectors of the economy.
The slate levy is a self-adjusting mechanism that manages the deficit or surplus in the fuel price account.
It acts as a temporary buffer to compensate oil companies when international fuel prices increase faster than domestic pump prices, with the levy added to fuel costs when the account goes into a deficit.
New fuel prices for May are expected to be announced before next Wednesday, with the current relief measures set to expire on 5 May.
The CEF does not provide daily snapshot data for LP Gas, so it is not currently possible to provide an expected price for the coming month.
A small consolation in the data is that, even with a R2 per litre increase, petrol prices will not reach their highest point on record.
The highest Petrol 95 has ever reached was R26.74 per litre in July 2022. At the current projection, pricing would be at R25.45 per litre in May.