While the extension of the petrol and diesel tax relief is a welcome sight, motorists and industry consumers in South Africa have been warned to brace themselves for what’s to come.
The National Treasury and the Department of Petroleum and Mineral Resources (DPMR) announced on Tuesday (28 April), that the tax relief for petrol and diesel will be extended by two months.
For petrol, the R3.00 per litre relief in April will continue in May, reduced to R1.50 per litre in June, and then terminate in July.
For diesel, the R3.00 per litre relief in April will be expanded to R3.93 per litre in May, before being halved to R1.96 per litre in June, and will terminate in July.
This staggered approach to reintroducing the fuel levy back into pricing follows the same method used in 2022, the last time the government intervened to limit the impact of rapidly rising fuel prices.
While the relief has an immediate impact at the pumps upon implementation, its continued effectiveness is determined by the over- and under-recoveries thereafter.
For example, when introduced in April, the immediate impact of the relief was to reduce the petrol and diesel price adjustments by R3.00 per litre.
This pulled what would have been an R6 per litre hike for petrol and an R10 per litre hike for diesel down to an R3 and a R7 per litre adjustment, respectively.
For May, the impact on price adjustments for petrol will be R0.00 per litre, as the cut has already been made. This means that the under-recovery of around R2 per litre is unaffected.
For diesel, the relief has been extended, so the impact on the fuel price adjustment will be a reduction of 93 cents per litre.
However, when it comes to restoring the fuel levy, the impact on adjustments will be reversed.
While motorists will still be getting a R1.50 per litre and R1.96 per litre ‘cut’ to fuel taxes in June, it also means that R1.50 and R1.97 per litre will be added back to the price of petrol and diesel that month.
If fuel recoveries in June remain negative, it will mean an even bigger price hike.
If the recoveries are positive, it could mean reduced price cuts or even a swing into a price hike if recoveries are close to neutral.
The same will happen in July, when the balance of R1.50 and R1.96 per litre is added back to prices that month, leading to the same situation.
The table below outlines how the changes impacted prices in April, and will impact fuel price adjustments in the months ahead.
Petrol prices
| Month | Fuel levy | Price Relief | Impact on price adjustment |
|---|---|---|---|
| April 2026 | R1.10 | -R3.00 | -R3.00 |
| May 2026 | R1.10 | -R3.00 | R0.00 |
| June 2026 | R2.60 | -R1.50 | +R1.50 |
| July 2026 | R4.10 | R0.00 | +R1.50 |
Diesel prices
| Month | Fuel levy | Price Relief | Impact on price adjustment |
|---|---|---|---|
| April 2026 | R0.93 | -R3.00 | -R3.00 |
| May 2026 | R0.00 | -R3.93 | -R0.93 |
| June 2026 | R1.97 | -R1.96 | +R1.97 |
| July 2026 | R3.93 | R0.00 | +R1.96 |
Beware the slate levy
The DPMR and National Treasury also explicitly warned about the slate levy, which will be adjusted for May.
“According to the Self-Adjusting Slate mechanism, the under recovery of importers of petroleum products must also be accommodated,” they said.
“As such, the Slate levy on petrol and diesel will also be adjusted for the month of May.”
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.
With the sharp fluctuations in global oil prices in March and April, the mechanism will kick in for May.
This will likely result in upward adjustments beyond the Central Energy Fund’s recovery data and the government’s tax relief.
On top of all these catches and caveats, the tax revenue lost to the relief will also have to be recovered elsewhere.
Treasury noted that the estimated cost of the temporary fuel levy relief from April to June 2026 is R17.2 billion in foregone tax revenue.
Because the fuel levy relief measure is designed to be revenue-neutral, it will be funded through other taxes.
This includes a combination of higher-than-expected tax revenue and underspending, it said.
This means that the task will largely fall to the South African Revenue Service (SARS) to tighten the screws on taxpayers, shifting the burden.
