June 2025 Fuel Prices: Temporary Relief Amid Rising Taxes and Calls for Reform

While South African motorists will benefit from another round of fuel price reductions this June, a deeper look reveals troubling signs beneath the surface—namely, a growing tax burden and calls for structural reform from the Automobile Association (AA) and economic analysts.

Fuel Prices Drop for Fourth Consecutive Month

From 4 June 2025, fuel prices will see a welcome decrease:

• Petrol (93 and 95 Unleaded): 25–30 cents per litre down

• Diesel (500ppm and 50ppm): 53–61 cents per litre down

The drop is primarily due to favorable exchange rates and a stable global oil price, with Brent crude hovering near $66 per barrel.

Tax Hikes Cancel Out Gains

Despite the lower prices, Finance Minister Enoch Godongwana announced a fuel tax increase—the first in three years. The General Fuel Levy will rise by 16 cents per litre for petrol and 15 cents for diesel. Including the Road Accident Fund (RAF) levy and carbon tax, total fuel taxation now exceeds R6.30 per litre, making up over 30% of the pump price.

As BusinessTech notes, these increases come with little evidence of improved road infrastructure or accountability in spending, raising concerns about the sustainability of this fiscal approach (source).

AA Sounds the Alarm: Reform Now Critical

The AA has issued a strong response to the levy hike, acknowledging fiscal pressures but warning of the “far-reaching consequences” on both consumers and the economy. They highlighted that:

• Lower-income households will be hit hardest, as they spend a higher share of income on transport.

• Fuel tax increases risk further inflating food and transport costs.

• The cumulative tax burden is becoming economically unsustainable.

In a formal statement, the AA renewed its call for a transparent overhaul of the country’s fuel pricing model, proposing:

• A forensic audit of GFL and RAF levy revenues

• Publication of the fuel pricing formula used by the Department of Mineral Resources and Energy

• Multi-stakeholder dialogue on alternative funding mechanisms

• Greater public engagement in shaping fuel taxation policy

Conclusion: Relief, But For How Long?

The June fuel price cuts will provide short-term relief, but the mounting fuel tax burden and lack of pricing transparency highlight a system under strain. With household costs climbing across the board, calls for a more equitable and transparent fuel pricing model are no longer just advisable—they’re essential.

The AA, economic analysts, and civic groups are aligned on one message: structural reform can no longer wait.