By Alani Janeke
With fuel prices set to fall in June, the increase in the fuel levy, announced in the third budget speech on Wednesday afternoon, 21 May, is set to be a stumbling block for farmers and consumers.
According to the revisions recorded for fuel prices on Tuesday, petrol prices could have decreased by about 24c/litre in June, and diesel prices by about 50c/litre.
Dawie Maree, FNB Agriculture’s head of information and marketing, says the drop in the diesel price would have been especially good for farmers who are currently harvesting or planting.
Enoch Godongwana, Minister of Finance, announced in his third budget speech for 2025 that the government is proposing to increase the fuel levy by 16c to R4.01 per litre for petrol and by 15c to R3.85 per litre for diesel from 4 June. This is part of the Treasury’s plan to increase its tax revenue, as VAT will no longer be increased.
Maree says fuel prices have decreased by 33% since the beginning of the year, and he does not expect the fuel levy to make such a difference that inflation rates will rise, which could soon have led to an increase in interest rates.
The rand-dollar exchange rate has returned to levels of around R18/$ in recent weeks. This was after the rand weakened significantly after US President Donald Trump announced sharp increases in export tariffs for many countries in April, among other things.
The international price of a barrel of crude oil has recently fluctuated between $60 and $70 per barrel. This is lower than the international oil price of last year. Some of the reasons for the lower oil prices are slower economic growth in China, which is leading to lower consumption in that economy. OPEC, the Organization of the Petroleum Exporting Countries, also recently decided to increase production, which is supporting inventory levels.
