Petrol price in South Africa hits record high

South African motorists filling up with petrol from 3 June 2026 will be paying the highest price on record for the fuel. 

While the short-term driver behind the elevated petrol price has been the conflict in the Middle East, there are significant long-term factors that are in South Africa’s control. 

This includes the rising proportion of the petrol price that is made up by taxes levied on fuel at the pump, such as the General Fuel Levy (GFL), RAF Levy, and wholesale margins. 

Another longer-term driver has been the weakening of the rand over the past two decades. This makes it more expensive to import fuel into the country. 

What has pushed these slower, longer-term drivers into the highest petrol price on record has been the sharp uptick in the oil price. 

This is due to disrupted supply from the Middle East after US-Israeli strikes on Iran resulted in the Strait of Hormuz being effectively shut. 

With over 20% of oil exports flowing through the Strait on a daily basis prior to the war, the disruption to shipping has a significant impact on global oil supply. 

This has been exaggerated by damage done to facilities in the region that are key to the extraction of oil and natural gas, as well as their export.

Typically, the impact of such an event will be exaggerated by the rand weakening significantly as investors turn risk off and retreat to safe-haven assets.

This time around, the rand has held its own as South Africa’s improving financial health, elevated previous metals prices, and a responsive Reserve Bank limits the fallout. 

South Africa’s Reserve Bank hiked interest rates by 25 basis points in May to prevent inflation from becoming embedded in the local economy and limit its spread from fuel into other sectors. 

It is widely expected to hike rates again in July, with fuel prices pushing inflation above 4% and further away from its 3% target. 

Fuel prices are expected not to come down as quickly as they rose, with the National Treasury phasing out its relief in June and July. 

The Treasury will reduce its fuel levy relief in June, adding R1.50 to fuel prices and offsetting any price decreases for petrol. In July, the R3 relief will fully be taken away, and the normal General Fuel Levy will be reinstated.

Long-term factors

The conflict in the Middle East is a short-term driver of the rising petrol price in South Africa, with longer-term factors contributing more significantly. 

Since the conflict began at the end of February, the price of 93 octane petrol has risen from R19.99 per litre to R27.95 per litre. 

This increase is significant, but relatively small over the long run, with a litre of 93 octane petrol costing motorists a mere R5.87 two decades ago. 

The steady rise since then has been driven by a weakening rand and surging taxes levied on fuel sales, along with other administered elements.

While the oil price is elevated in 2026, it is far off its peak of $140 per barrel in the 2008 commodity boom and has roughly stayed flat over the past decade.

The largest driver has been a weaker local currency, with this making it more expensive for South Africa to import oil and refined products. 

In 2006, the rand traded at around R6 to the US dollar, and while it has strengthened over the past year, it is still significantly weaker at R16.20. 

This has been driven by South Africa’s slow economic growth, which has manifested itself as a financial crisis. 

Government debt as a share of GDP has skyrocketed from 26% in 2008/09 to over 77% in 2026, coming with credit rating downgrades into junk status. This saw money flood out of South African assets, weakening the currency. 

This has been coupled with surging taxes and administered levies on fuel sales, with the government increasingly using the GFL as a way to plug holes in its budget.

The GFL was initially meant to fund road maintenance and infrastructure upgrades. However, the funds generated have never been ringfenced and can be used by the government however it wishes.

The collapse of the Road Accident Fund (RAF) has seen the levy used to fund it rise substantially to prop up its finances. 

In 2006, the combined GFL and RAF Levy totalled less than R1.50 per litre. Today, if the National Treasury’s relief is excluded, they would make up over R6 of the final price at the pump.

Other administered elements of the fuel price, such as wholesale margins, storage and transport levies, and the slate levy, have also increased significantly over the past 20 years

As a result, the petrol price has steadily climbed over the past 20 years, as can be seen in the graph below.