Fuel levy hikes coming 1 April: Petrol to cost 19c more per litre

New fuel levies will take effect in South Africa starting 1 April. The South African fuel levy increase will raise the general fuel levy to 4.10 ZAR per litre for petrol and 3.93 ZAR per litre for diesel, as Finance Minister Enoch Godongwana announced in the February Budget speech. 

In addition to the overall fuel tax, the 2026 budget also confirmed the increases for the  Road Accident Fund (RAF) levy and the carbon fuel levy. These SA fuel tax hikes will increase the base cost of fuel before accounting for exchange-rate movements or changes in international oil prices. 

Although the South African fuel levy increase was foreseeable, it comes at a time when world oil prices are high. This combination of SA fuel tax increases and oil price increases can influence inflation, interest rate expectations, and currency movements. 

What is actually happening at the pumps

Effective from 1 April 2026, South Africans will have to pay more per liter of fuel. The confirmed pump prices are as follows:

A last-minute government ruling prevented the numbers from being even higher. Finance Minister Godongwana announced a temporary reduction of 3.00 ZAR per litre in the general fuel levy after consultation with the Minister of Mineral and Petroleum Resources, Gwede Mantashe. The relief runs from 1 April to 5 May 2026, costing the government roughly 6 billion ZAR in tax revenue for the month.

Without that relief, petrol could have risen by around 5 to 6 ZAR per litre, and diesel by 8 to 10 ZAR or more.

The effect of the fuel levy hike 

The South African fuel levy increase does not just affect motorists. It affects all South Africans in all aspects. Transport and logistics costs usually increase first, within days or weeks of a pump price increase. The South African National Taxi Council (SANTACO) warned that taxi fare increases may follow, as operators deal with higher diesel costs.

Higher fuel prices mean higher delivery costs, commuting expenses, and production costs. Businesses deal with this extra cost by passing part of these costs to consumers. 

After transport costs rise, the prices of goods in stores follow next. Within one or two months of the South African fuel levy increase, groceries, vegetables, and even everyday items become more expensive. This is often due to the cost of moving goods from where they are produced or grown to where they are sold. 

There is also a near-term inflation risk for April and May readings. If inflation rises, the South African Reserve Bank may adopt a cautious stance. The SA fuel tax hikes may push inflation higher, reducing the likelihood of near-term rate cuts. 

For forex traders tracking the USDZAR pair, the South African fuel levy increase is a new variable in the prediction. Increasing transport prices may drive inflation up, affecting rate expectations and currency direction.

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What the SARB is watching

At the moment, the South African Reserve Bank (SARB) is holding its benchmark repo rate at 6.75%, ending an easing cycle that started in 2025. The Monetary Policy Committee cited the deteriorating near-term inflation outlook and the price shock as the reason for the pause.

For SA fuel tax hikes to influence rate decisions, the transmission mechanism runs through inflation. Higher pump prices push up transport costs. Rising transport costs push up consumer prices. If April and May CPI figures exceed expectations, the SARB may hold for longer or, in a worst-case scenario, consider tightening.

The USDZAR chart below shows how rate-hold expectations are already reflected in rand positioning. The currency has been under pressure even before the full fuel cost transmission works through to CPI.

The South African Reserve Bank will hold its next Monetary Policy Committee meeting at the end of May, when it will have April CPI figures. That data will let consumers and traders know how bad the fuel price hike is.

What this means for forex traders watching USD ZAR

The South African fuel levy increase, combined with the oil price shock, creates a clear set of signals for forex traders monitoring the USD ZAR pair. 

The rand has already been under pressure, trading near 17 ZAR per USD in early April after recovering from a low of around 17.20 ZAR on 30 March. The currency depreciated close to 7% against the dollar as investors moved toward safer assets.

Traders need to watch for several factors during this SA fuel price hike and in Q2 2026. They include: 

• The SARB rate path: If the bank holds or hikes in an extreme scenario, it supports the rand in the short term by keeping South African interest rates attractive relative to global peers. However, it also constrains economic growth.
• The temporary 3 ZAR levy relief: If, after 5 May, oil prices remain elevated and the rand has not recovered, removing the relief could cause a sharp increase in fuel costs. 

When April and May CPI data confirm that the economy has not absorbed the fuel shock, traders should expect the SARB to remain firmly on hold. But if CPI data comes in on the upside and the rand continues to weaken, the pressure on South African consumers and businesses could intensify well beyond what April pump prices suggest.

Conclusion 

The 1 April fuel price adjustment shows how global events can rapidly translate into daily costs for South African households and companies. 

The increase in fuel levy in South Africa was inevitable, but the Middle East conflict accelerated it. While the temporary 3 ZAR levy reduction helps a bit, the pressure remains. Oil prices remain high, and the rand remains vulnerable to global uncertainty. 

For forex traders and anyone tracking how South African inflation moves in the coming months, the data points to watch are April CPI, the 5 May levy expiry, the next SARB MPC decision, and the Brent crude oil prices.

Traders interested in South African assets and ZAR currency pairs can explore the relevant instruments available on Exness. For more background on how oil prices affect forex markets, see Exness Insights.