It is a tale of two pumps for South African motorists next week as petrol is expected to climb to an all-time high, while diesel prices are set for a massive drop.
Lower international oil costs and a stronger rand should have triggered relief across the board.
However, National Treasury is halving its temporary General Fuel Levy relief on June 3.
This rollback adds R1.50 back to petrol and R1.96 back to diesel, completely wiping out the market gains for petrol vehicle owners.
The tax relief refers to an emergency intervention launched by Finance Minister Enoch Godongwana.
Triggered by a surge in global oil prices following intense Middle East conflict, Treasury temporarily slashed the General Fuel Levy by R3.00 per litre for petrol in April.
In May, they extended this relief and pushed the diesel tax cut to R3.93 per litre. It effectively reduced the active diesel levy to zero.
While this short-term intervention successfully shielded consumers from catastrophic price shocks during April and May, it cost the state a massive R17.2bn in foregone tax revenue.
To balance the national budget, Treasury is now systematically phasing the standard levies back into the fuel price structure before a full restoration in July.
According to data from the Central Energy Fund (CEF):
- Petrol users face an increase of about R1.25 per litre. International market data showed a theoretical over-recovery of up to 25 cents. However, adding the R1.50 tax portion back means 95 unleaded petrol will hit a high of R27.01 at the coast. Gauteng residents can expect to pay around R27.88.
- Diesel users will enjoy a massive price cut. Diesel experienced a massive international over-recovery of up to R5.29 per litre. Even with the R1.96 tax clawed back by the state, diesel will drop by between R2.64 and R3.33 per litre. The price of 500ppm diesel should fall to roughly R27.84 in Gauteng.
The Department of Mineral and Petroleum Resources will announce the official adjustments early next week.
The final figures may still fluctuate slightly due to the Slate Levy. It is expected to add R1.22 to May prices to cover historical oil company losses.
Nabob News
