Rising prices for food and other basic goods arising from mounting transport and logistics costs right across the economy are expected in the days and weeks after Wednesday’s anticipated jump in fuel prices, triggered by the ongoing US-Israel war with Iran.
Fuel prices are likely to rise by between R5.53 and R11.63 per litre on 1 April – in the absence of any relief by the government. The exact number will be calculated on the basis of under-recoveries recorded by the Central Energy Fund – but all indications are that Wednesday’s fuel price hike will be the largest in South Africa’s history.
Havoc in international oil markets followed the stifling of oil shipments through the Strait of Hormuz, a chokepoint in the Gulf, a vital shipping conduit Iran shares with other key oil-producing states, including Iraq, Kuwait, Qatar, Saudi Arabia and the UAE.
About 20% of the world’s oil and liquefied natural gas usually passes through the strait. According to estimates from the US Energy Information Administration, some 20 million barrels of oil and oil products passed through the Strait of Hormuz every day in 2025.
News24 reports that at the end of the four weeks used to calculate April’s changes, the under-recoveries per litre are:
- 95-octane petrol: R5.82
- 93-octane petrol: R5.32
- diesel with 0.05% sulphur: R10.13
- diesel with 0.005% sulphur: R10.27
- paraffin: R11.63
The under-recoveries indicate how much motorists have underpaid for fuel over the past month, based on the international prices of the different fuels in dollars, combined with the rand-dollar exchange rate.
Earlier in the week, the Democratic Alliance urged the government to consider cutting the general fuel levy and the Road Accident Fund levy by 50%, suggesting that surpluses from the Compensation Fund and the Sector Education and Training Authority (SETAs) be used to fund the shortfall in revenue resulting from cutting the levies.
However, Treasury director-general Duncan Pieterse indicated that, beyond limited relief, cushioning the impact of higher fuel prices would cost millions that the government did not have readily available.
He is quoted as saying: “Unless you have those kinds of resources – which currently we do not have available as part of our fiscal buffers – you are either looking at no relief, or you’re looking at a very small amount of relief.”
Reports say fuel price hikes are expected to filter through the economy quickly, with transport and logistics costs likely to bear the brunt. Higher diesel prices in particular tend to lift operating costs across supply chains, placing additional strain on businesses already contending with weak demand.
For consumers, the knock-on effect is typically felt through higher inflation, especially in food and basic goods, as distribution costs rise.
Finance Minister Enoch Godongwana announced on Wednesday that a Cabinet committee had been established to craft the government’s response to rising fuel costs.
Earlier, the Department of Mineral and Petroleum Resources responded to social media posts airing speculation about fuel shortages that South Africa’s fuel supply was stable and that claims of shortages “risk creating unnecessary alarm and confusion among the public”.
It said: “While there may be isolated localised logistical challenges affecting the movement or availability of fuel in certain areas, these are operational in nature and do not constitute a national supply shortage. These issues are being actively managed through established industry and regulatory channels. It is therefore incorrect and misleading to link such isolated domestic logistical matters to broader geopolitical developments.”
Sources: SABC News, IOL, BusinessTech, EWN, News24, BBC
[Image: engin akyurt on Unsplash]