Short-term fuel price relief: Fuel levy reduction extended, with further cut for diesel

Government has stepped in again to provide fuel cost relief for motorists amid the price shock caused by the ongoing tensions in the Middle East.

The temporary reduction in the general fuel levy that was due to end in early May, has now been extended to June.

This would address concerns of higher inflation and negative impacts on economic growth due to increasing prices, the National Treasury and Department of Mineral and Petroleum Resource said in a joint statement.

The R3-per-litre cut in the fuel levy for petrol now remains in effect until 2 June, and there is a further reduction for diesel.

Another 93 cents has been added, bringing relief of R3.93 per litre for diesel.

In a phasing-out process, these reductions are set to be halved in June, and come to an end in July.

Relief measures proposed for May and June 2026:

1. Extension of temporary reduction in general fuel levy:

The R3 per litre reduction in the general fuel levy for petrol is extended until 2 June. Given the large expected increases in the price of diesel, temporary relief for diesel is increased by 93 cents to R3.93 per litre, reducing the levy to zero, from 6 May to 2 June.

The general fuel levy for petrol will remain at R1.10 per litre and the general fuel levy for diesel will decrease from R0.93 per litre to R0.00 per litre.

2. For the month of June 2026:

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 per litre for petrol and R1.96 per litre for diesel, effective from Wednesday 3 June 2026 to Tuesday 30 June 2026.

“This will increase the general fuel levy for petrol from R1.10 per litre to R2.60 per litre and increase the general fuel levy for diesel from R0.00 per litre to R1.97 per litre.”

3. From 1 July onwards:

The general fuel levy for petrol returns to R4.10 per litre and the general fuel levy for diesel returns to R3.93 per litre.

Government says the estimated cost of the temporary fuel levy relief from April to June 2026 is R17.2 billion in what is called foregone tax revenue.

This will be funded through a combination of higher-than-expected tax revenue and underspending, and will not have an impact on the fiscal framework adopted by Parliament following the 2026 Budget, the statement explains.

It's a process of trying to balance out a number of issues, says economist Sifiso Skenjana, MD of ESG Analytics.

Looking at state procurement of diesel, Eskom remains one of the largest users, with around 30% of our refined diesel going to the power utility through their open gas turbines.

Skenjana also notes that about 57% of the refined diesel we procure comes through the Strait of Hormuz.

"So, the effect we're seeing is that the rising diesel price has a dampening effect on a lot of heavy industry, and also then creates new issues in a local economy context, particularly in the illicit trade space."

"They've found about 100 stations now mixing paraffin with their diesel... so you've really got to figure out mechanisms that balance the scope of the multiple pressure points that are coming through."

Scroll up to the audio player to hear more from Skenjana on government efforts to mitigate the impact of higher fuel prices