South African motorists will face higher fuel prices starting Wednesday, 4 June 2025. This follows the first increase in the General Fuel Levy (GFL) in three years. Finance Minister Enoch Godongwana announced an inflation-based hike of 16 cents per litre for petrol and 15 cents per litre for diesel. These changes are part of the 2025/26 fiscal year budget measures. The increase is intended to help address government fiscal challenges after the scrapping of a proposed VAT hike earlier this year.
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Impact on Petrol and Diesel Prices
The fuel levy increase will raise the GFL on petrol to R4.01 per litre and diesel to R3.85 per litre. Current market trends suggested potential fuel price decreases in June. However, the levy hike significantly reduces these expected savings. For example, petrol prices might only drop marginally by around 3 cents per litre. Alternatively, prices could increase slightly if the rand weakens or global oil prices rise further.
The combined tax on petrol, including the GFL, Road Accident Fund levy, carbon tax, and customs duties, will reach approximately R6.37 per litre. This accounts for about 30% of the total petrol price. Diesel taxes will total around R6.24 per litre, roughly 33% of the diesel price.
A table summarising recent petrol price changes in South Africa, including the impact of the June 2025 fuel levy hike:
| Fuel Type | Price Change (May 2025) | Expected Price Change (June 2025)* | Notes |
|---|---|---|---|
| Petrol 93 | Decrease of 20 cents/litre | Net decrease of 4 cents/litre | Initial market over-recovery of 19c offset by 16c fuel levy increase |
| Petrol 95 | Decrease of 19 cents/litre | Net decrease of 3 cents/litre | Similar to Petrol 93, levy hike reduces expected savings |
| Diesel 0.05% | Decrease of 48 cents/litre | Net decrease of 33 cents/litre | Initial large over-recovery partially offset by 15c fuel levy increase |
| Diesel 0.005% | Decrease of 49 cents/litre | Net decrease of 34 cents/litre | Wholesale diesel prices reflect similar trends |
| Illuminating Paraffin | Decrease of 52 cents/litre | Not specified | Significant price drop expected, unaffected by fuel levy |
* Net price changes factor in the General Fuel Levy increase effective 4 June 2025 (16c/l for petrol, 15c/l for diesel).
Additional context:
- The General Fuel Levy will rise to R4.01 per litre for petrol and R3.85 per litre for diesel.
- Total tax on petrol, including RAF levy and carbon tax, will be about R6.37 per litre (~30% of price).
- Total tax on diesel will be around R6.24 per litre (~33% of price).
- Despite favourable market conditions suggesting price drops, the levy hike significantly reduces these savings and may even cause slight price increases if the rand weakens or oil prices rise.
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Government Rationale and Economic Context
Minister Godongwana explained that the levy increase is necessary to cover a significant funding gap of nearly R62 billion over the next three years. This fiscal shortfall emerged after the government abandoned the VAT increase due to political and public opposition. The fuel levy hike is the sole new tax measure announced in the 2025 budget. It is linked to inflation adjustments rather than an attempt to generate additional revenue.
Public and Industry Response
The Automobile Association (AA) and other industry stakeholders have expressed strong concerns about the levy increase. The AA warned that the hike will exacerbate the cost-of-living crisis by increasing transport and operational costs across the economy. They highlighted that lower-income households will be disproportionately affected, as fuel costs form a larger share of their expenses. The AA called for greater transparency and structural reforms to mitigate the impact on consumers.
Broader Economic Effects
Fuel prices influence a wide range of goods and services due to their role in transportation and logistics. This levy increase is expected to contribute to inflationary pressures, affecting food prices and other essential commodities. Economists have noted that the fuel levy hike, like the previously proposed VAT increase, disproportionately impacts low-income earners. This intensifies economic hardship for vulnerable populations.
