June will see the fourth monthly increase in the petrol price.

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The price of diesel is set to drop on Wednesday, bringing some relief after three months of massive price hikes totalling R13.26 per litre.

Unfortunately for most motorists, the petrol price will increase again, unless the National Treasury surprises everybody by extending the fuel price levy relief instituted in May. Treasury has previously said it cannot afford to extend the relief, which is set to be halved in June and end in July.

The final overrecovery on wholesale diesel for June’s prices is R5.57 per litre for diesel with 0.05% sulphur, and R4.94 per litre for 0.005%. With the fuel levy relief on diesel set to be reduced by R1.97 per litre in June, the final price cut is estimated at R3 or R3.60, depending on the diesel grade.

Over-recovery refers to the fact that the pump price is currently higher than the import cost, meaning motorists are overpaying for fuel.

The overrecovery reflects that international diesel prices have dropped over the past four weeks and that the rand has strengthened slightly, adding about 14c to the overrecovery.

The overrecovery of 43c per litre on 95-octane petrol and 46c on 93-octane will be wiped out if the fuel levy relief is reduced by R1.50 per litre, as expected. It means petrol prices might increase by R1.07 or R1.04, respectively.

Since March, petrol has already become R6.53 per litre more expensive in Gauteng.

The final prices have yet to be confirmed by the Department of Petroleum and Mineral Resources, with the announcement expected at the latest by Tuesday, before the changes are triggered after midnight.

The slate levy, currently R1.23 per litre, remains an unknown factor. Since it is based on previous months’ fuel price increases, there is some risk that it might increase. The slate fund is used to compensate wholesalers when the prices they pay on a daily basis increase after regulated prices were frozen for the month.

The expected diesel price drop, while not huge, is great news for the entire economy, as farmers, manufacturers, wholesalers, retailers and many service providers use diesel for the production and transport of goods and the delivery of services.

It might temper inflation’s upward trend a little. The prospect of significantly higher inflation this year has just triggered the first interest rate hike in three years, with a risk of two to three more. The Reserve Bank now expects average inflation of 4.4% for 2026, far exceeding its 3% target.

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The overrecovery on wholesale paraffin is R5.96 per litre.

The price of Brent crude oil dropped below $100 per barrel this week on hopes that a US-Iran peace deal is near.

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