Relief at the pumps: South Africa set for significant fuel price cuts in July

<h2>TRUCE</h2>

<p>South African motorists may see significant fuel price reductions in July, contingent on international oil prices and the reinstatement of fuel taxes.</p>

<p>Image: Tumi Pakkies / Independent Newspapers</p>

<p>South African motorists may see significant fuel price reductions in July, contingent on international oil prices and the reinstatement of fuel taxes</p>

<p>This comes after the truce signed by the US and Iran last week caused international oil prices to subside.</p>

<p>However, assuming that the truce holds, and that the crucial Strait of Hormuz choke point remains open, much of the relief might only be seen in August fuel prices.</p>

<p>The latest daily report from the Central Energy Fund shows petrol price over-recoveries of between R2.93 (95 Unleaded) and R2.97 (93 Unleaded), while diesel is in the green by between R4.60 (500ppm) and R5.02 (50ppm).</p>

<p>But there is an unfortunate caveat. This comes in the form of the fuel tax reprieve, which ends in July, adding R1.50 back into the fuel price calculation. The fuel tax relief measure initially totalled R3.00 in April, but it was halved at the beginning of June. After it falls away completely from July 1, South Africans will once again be paying the full R4.10 per litre General Fuel Levy.</p>

<p>With this factored in, July’s petrol price cut could be reduced to just R1.50, and diesel to around R3.10 to R3.50. However, if the slate levy is adjusted lower than its current level of R1.58, this could mitigate the tax reinstatement to a degree. In theory, a sustained fall in international oil prices can lead to a lower slate levy over time, as this mechanism primarily compensates oil companies for price volatility in the preceding months.</p>