In April, government introduced relief of R3 per litre in the general fuel price levy to buffer motorists against monster price increases due to rocketing oil prices and a weak rand during the US-Israel war on Iran.

• Government has extended its fuel levy relief into May, with increased support for diesel.
• Levy relief on diesel prices will increase from R3 to R3.93 a litre.
• But the fuel levy relief will be halved in June, and then completely fall away in July.
• For more financial news, visit News24 Business.

Treasury will extend its fuel levy relief into May – and increase support for diesel – as more price hikes loom.

In April, government introduced relief of R3 per litre in the general fuel price levy to buffer motorists against monster price increases as oil prices rocketed and the rand weakened due to the Iran war.

On Tuesday, Finance Minister Enoch Godongwana announced that the R3 relief for petrol would be continued in May.

At current levels, 95 unleaded petrol is set for an increase of more than R2 per litre on 6 May, when fuel prices will be adjusted.

But the fuel levy relief on diesel will be increased by 93 cents to R3.93 per litre. This will effectively reduce the diesel fuel levy to zero.

This is because of the large expected increases in the price of diesel, Godongwana said in a statement.

READ | EXPLAINER | Why the diesel price is skyrocketing – more than oil, petrol

Currently, wholesale diesel prices are set for a hike of more than R5.40 per litre in May. Even with the extra levy relief, this will push the wholesale price of diesel above R30 in Gauteng.

Government plans to halve the levy relief in June, before it is phased out and restored to pre-war levels in July, Treasury confirmed on Tuesday.

“The estimated cost of the temporary fuel levy relief from April to June 2026 is R17.2 billion in foregone tax revenue,” Godongwana said.

“The fuel levy relief measure is designed to be revenue neutral and 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.”

He added:

The slate account is used to pay fuel importers for the difference between the regulated fuel price they are allowed to charge and the actual price they pay to import or manufacture fuel during that month, which varies daily on international markets and is also affected by the fluctuating rand-dollar exchange rate.

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A slate levy must be paid out when the account is more than R500 million in the red.

The Department of Mineral and Petroleum Resources has also begun a review of the formula that will determine how fuel prices are regulated going forward, Treasury said on Tuesday.

The increase in fuel prices, and especially the second-round effects, has raised fears of a sharp spike in SA’s inflation rate and possibly interest rate hikes.