South Africa is facing unprecedented fuel price hikes driven by global oil market volatility and local currency pressures. Petrol prices are set to increase by approximately R1.85 to R2.05 per litre in May 2026. Diesel prices are projected to rise by over R5 per litre, with wholesale prices exceeding R30 per litre in some regions.
Key facts:
- The South African government has extended fuel levy relief measures, reducing the diesel levy to zero for May.
- The expiry of the R3 per litre General Fuel Levy reduction is scheduled for May 5, 2026.
- Brent crude prices have surged above $110 per barrel due to Middle East conflict.
- The projected fuel price increases are expected to add 0.6 percentage points to the monthly Consumer Price Index.
- The rand-dollar exchange rate contributes an estimated R1 per litre to pump price pressure.
Investec Chief Economist Annabel Bishop highlighted that higher diesel costs push up logistics costs, which then flows into retail prices and food inflation. She noted that the projected increases could potentially lift May CPI to 4.2%.
The ongoing disruption in the Strait of Hormuz is a primary catalyst behind the current fuel price environment. The total fiscal cost of maintaining fuel levy relief from April through June is estimated at R17.2 billion. The government plans to gradually phase out this relief, reducing it in June and removing it entirely by July.
