South African motorists who've been tightening their belts for four straight months of fuel hikes might finally catch a break in July. Early data from the Central Energy Fund (CEF) shows petrol could drop by as much as R2.54 per litre, with diesel decreases of over R4 per litre and illuminating paraffin down by nearly R5.

As of 11 June, the CEF's daily projections show strong over-recoveries across the board. Petrol 93 is looking at a decrease of 254 cents per litre, petrol 95 at 252 cents. Diesel 0.05% could fall by 428 cents, while diesel 0.005% may drop by 457 cents. Illuminating paraffin is set for the biggest cut: 488 cents per litre.

An over-recovery means current market conditions are cheaper than the prices being charged at the pump. The official adjustment is only calculated at the end of the month, so nothing is set in stone yet. But if things stay as they are, July will bring serious relief.

What's driving this? Two things: international oil prices have softened since late May, helped by easing geopolitical tensions and optimism about a possible US-Iran truce. At the same time, the rand has strengthened a bit, moving from R16.65/$ to R16.52/$ on average. That makes imported fuel cheaper.

The Department of Mineral and Petroleum Resources (DMPR) also noted that international diesel and paraffin prices have dropped significantly because of lower seasonal demand in the northern hemisphere.

But don't pop the champagne just yet. The government is still bringing back the fuel levy it temporarily cut earlier this year. In June, Treasury reinstated R1.50 per litre on petrol and R1.96 on diesel. The final phase comes in July, adding another R1.50 to petrol and R1.96 to diesel.

Here's the thing: the current over-recoveries are big enough to absorb those levy increases and still leave room for a price cut. So even with the levy coming back, motorists should still see lower prices at the pump.

There's also the slate levy — used to balance the difference between actual and regulated fuel costs. It was bumped up from 122.70 cents per litre to 157.74 cents per litre in June to recover an R18.28 billion industry under-recovery. That's an extra 35 cents per litre that won't help, but it's already baked into the current prices.

Analysts are cautious. International oil prices and the rand-dollar exchange rate are the biggest wildcards. If oil shoots up again or the rand weakens, those over-recoveries could vanish quickly. But for now, the outlook is the most positive it's been in months.

"If the market conditions were to remain consistent for the remainder of the month – an unlikely scenario with the rand/dollar exchange rate fluctuating and the oil price ever changing – a decrease of 254 cents per litre is expected for petrol 93 octane motorists."

  • Petrol 93: decrease of 254 cents/litre
  • Petrol 95: decrease of 252 cents/litre
  • Diesel 0.05%: decrease of 428 cents/litre
  • Diesel 0.005%: decrease of 457 cents/litre
  • Illuminating paraffin: decrease of 488 cents/litre
  • Slate levy increased from 122.70c to 157.74c/litre in June
  • Slate levy recovery balance: R18.28 billion
  • Rand improved from R16.65/$ to R16.52/$