No Further Fuel Levy Relief: Petrol to Hit All-Time Highs in June 2026 as R17.2 Billion Subsidy Ends
No Further Fuel Levy Relief: Petrol to Hit All-Time Highs in June 2026 as R17.2 Billion Subsidy Ends
JOHANNESBURG – Government says there will be no further fuel levy relief as Treasury looks to rebalance the country’s finances. The temporary fuel subsidy, which cost government approximately R17.2 billion in lost tax revenue, is being phased out after providing relief to consumers for just three months.
The cuts were introduced to cushion consumers from soaring fuel prices linked to the Middle East War. But Treasury has now signaled that the relief measures will be phased out in the coming months.
“This is further disrupting an already fragile global economic environment, shaped by trade wars and supply chain vulnerabilities.”
— Minister Enoch Godongwana, tabling his budget vote in Parliament
What Was the Fuel Levy Relief?
In April 2026, the government slashed the general fuel levy by R3 per litre to soften the blow for motorists and businesses after conflict in the Middle East sent global oil prices skyrocketing. The intervention prevented what would have been far steeper increases in petrol and diesel prices.
For diesel, the relief was even greater – the levy was reduced to zero in May, effectively suspending the diesel levy entirely.
The support was later extended into May as geopolitical tensions persisted longer than expected. However, the relief will now be phased out from June.
R17.2 Billion ‘Gift’ Comes to an End
Tabling his budget vote in Parliament, Godongwana confirmed that the temporary reduction in the fuel levy had already cost the government about R17.2 billion in lost tax revenue.
The minister warned that the government must now reassess its fiscal position amid mounting global uncertainty and continued domestic economic pressures.
How the Phase-Out Works
The relief will be phased out in two stages:
| Month | Petrol Levy Add-Back | Diesel Levy Add-Back |
|---|---|---|
| June 2026 | +R1.50 per litre | +R1.97 per litre |
| July 2026 | +R1.50 per litre (remaining) | +R1.96 per litre (remaining) |
From 3 June 2026, half of the tax relief will be added back to the fuel price, with the full tax amount restored in July.
June 2026 Fuel Price Projections
When factoring in the return of the fuel levy, the outlook for petrol and diesel diverges sharply:
Petrol: Heading for All-Time Highs
95 unleaded petrol is expected to reach all-time highs of R27.42 at the coast and R28.32 inland.
| Fuel Type | Inland (Gauteng) | Coastal | Change |
|---|---|---|---|
| 93 Petrol | R28.15 | R27.36 | +R1.63 |
| 95 Petrol | R28.32 | R27.45 | +R1.69 |
Diesel: Limited Relief
While international oil price movements have improved, the withdrawal of the levy relief means diesel decreases will be limited.
| Fuel Type | Inland (Gauteng) | Coastal | Change |
|---|---|---|---|
| Diesel 0.05% (wholesale) | R28.73 | R27.86 | -R2.44 |
| Diesel 0.005% (wholesale) | R30.33 | R29.07 | -R1.55 |
Why Is Petrol Rising While Diesel Drops?
The diverging fortunes between diesel and petrol come down to two factors:
- International oil prices have stabilised significantly, with diesel markets seeing stronger over-recoveries (R3.52–R4.41/L) than petrol
- The rand has strengthened mildly, helping to counter international fuel price increases
However, these underlying improvements are largely offset by the return of the fuel levy for petrol, while diesel’s stronger over-recoveries allow for some relief despite the levy add-back.
Economists Warn of Inflationary Pressure
Motorists and businesses are expected to face renewed pressure at the pumps, with diesel prices already above the R30 a litre mark in some areas. Economists warn higher fuel costs could add pressure to inflation and transport costs across the economy.
Already, South Africa’s inflation climbed to a 20-month high of 4% in April, driven by the fuel price shock. Petrol prices recorded their biggest increase this century.
“Consumers were dealt a painful fuel price blow in April. The index for fuel rose by 18.2 percent from March, the steepest monthly increase since the current CPI series began in 2008.”
— Statistics South Africa
Diesel Users: A Sharp Hike Already Behind You
Diesel users have already endured a massive shock. The price of diesel surged by 35.4% in April alone, with average diesel prices jumping from R21.28 per litre in March to R28.80 in April. Over April and May, cumulative diesel hikes approached nearly R13 per litre.
The June decrease, while welcome, only partially offsets the steep increases of the previous two months.
When Do the New Prices Take Effect?
The new fuel prices will take effect from 00:01 on Wednesday, 3 June 2026.
Key Takeaways
- R17.2 billion – Cost to government of the three-month fuel subsidy
- June 2026 – Phase-out begins, with R1.50/L added back to petrol and R1.97/L to diesel
- July 2026 – Full tax relief ends, with final R1.50/L (petrol) and R1.96/L (diesel) added back
- Petrol – Expected to hit all-time highs of R28.32 inland
- Diesel – Limited relief expected with decreases of R1.55–R2.44/L
- Inflation – Climbed to 20-month high of 4% in April due to fuel shock
Government confirms no further fuel levy relief – the R17.2 billion subsidy ends. Petrol prices to hit all-time highs in June, while diesel sees limited relief. Effective 3 June 2026.
#FuelLevyRelief #FuelPriceSA #PetrolPrice #DieselPrice #EnochGodongwana #NationalTreasury #SouthAfricaEconomy #Inflation
Frequently Asked Questions: Fuel Levy Relief Ends June 2026
Click on any question below to reveal the answer.
What is the fuel levy relief and why is it ending?
The fuel levy relief was a temporary government measure that slashed the general fuel levy by R3 per litre for petrol and reduced the diesel levy to zero. It was introduced in April 2026 to cushion South Africans from soaring oil prices caused by the Middle East war. The relief is ending because it cost government approximately R17.2 billion in lost tax revenue, and Treasury needs to rebalance the country’s finances.
When does the fuel levy relief officially end?
The phase-out begins on 3 June 2026. Half of the tax relief (R1.50 per litre for petrol and R1.97 per litre for diesel) will be added back on this date. The remaining relief will be completely removed on 1 July 2026.
How much will petrol cost in June 2026?
95 petrol is expected to reach all-time highs. Inland (Gauteng): approximately R28.32 per litre. Coastal: approximately R27.45 per litre. This represents an increase of about R1.69 per litre compared to May prices.
Will diesel prices also increase in June?
No, diesel is expected to see limited relief. Diesel 0.05% wholesale is projected to decrease by approximately R2.44 per litre to around R28.73 inland. However, this decrease is much smaller than it would have been without the levy add-back because the government is also adding R1.97 per litre back to diesel.
Why is petrol increasing while diesel is decreasing?
Two main factors explain the divergence. First, international oil prices have stabilised, with diesel markets seeing stronger over-recoveries (R3.52 to R4.41 per litre) than petrol. Second, the rand has strengthened mildly, helping to counter international price increases. However, the return of the fuel levy largely offsets petrol’s smaller over-recovery, while diesel’s stronger over-recovery allows for some net relief despite the levy add-back.
How much did the fuel levy relief cost government?
The temporary fuel subsidy cost government approximately R17.2 billion in lost tax revenue over just three months. This was confirmed by Minister Enoch Godongwana when tabling his budget vote in Parliament.
What did petrol and diesel cost before the relief?
In March 2026, before the relief was implemented, petrol prices were significantly lower. Diesel users have already endured a massive shock, with diesel prices surging by 35.4% in April alone – from R21.28 per litre in March to R28.80 in April. Over April and May, cumulative diesel hikes approached nearly R13 per litre.
What did Statistics South Africa say about the April fuel price hike?
Statistics South Africa stated: “Consumers were dealt a painful fuel price blow in April. The index for fuel rose by 18.2 percent from March, the steepest monthly increase since the current CPI series began in 2008.”
How will higher fuel prices affect inflation?
Economists warn that higher fuel costs could add pressure to inflation and transport costs across the economy. Already, South Africa’s inflation climbed to a 20-month high of 4% in April, driven by the fuel price shock. Higher transport costs will eventually feed into food prices and other goods.
Will there be any further fuel levy relief from government?
No. Government has confirmed there will be no further fuel levy relief. Minister Enoch Godongwana stated that Treasury must reassess its fiscal position amid mounting global uncertainty and continued domestic economic pressures. The relief is being phased out completely by July 2026.
What did Minister Godongwana say about the global economic context?
Minister Enoch Godongwana said: “This is further disrupting an already fragile global economic environment, shaped by trade wars and supply chain vulnerabilities.” He was speaking while tabling his budget vote in Parliament.
When will the new fuel prices take effect?
The new fuel prices will take effect from 00:01 on Wednesday, 3 June 2026. The official announcement will be made by the Department of Mineral and Petroleum Resources at the end of May 2026.
