South Africa is facing renewed concern over fuel security and rising living costs as global oil prices surge following escalating conflict in the Middle East, raising fears of steep fuel price hikes in the coming months.
The recent outbreak of hostilities involving the United States, Israel, and Iran has triggered a global energy shock, sending oil prices soaring by more than 40%.
Economists warn that if geopolitical tensions persist, prices could climb beyond $150 a barrel, placing further strain on already pressured economies and consumers.
Despite the turmoil in international markets, Mineral and Petroleum Resources Minister Gwede Mantashe has assured South Africans that the country is not currently at risk of running out of fuel.
“The Department remains in continuous contact with oil companies operating in the country to ensure the stability and security of fuel supply, while closely monitoring developments in the Middle East and their potential impact on global oil markets and fuel prices,” Mantashe said.
The department said South Africa’s fuel production currently relies on two operational crude oil refineries, NATREF and Astron Energy, as well as the Sasol Secunda coal-to-liquids plant, which continues to play a crucial role in domestic fuel production.
These facilities depend largely on crude oil imports from West Africa and increasingly from other parts of the African continent.
However, the Astron Energy refinery is currently undergoing a planned maintenance shutdown. Authorities say the company has secured sufficient fuel imports to ensure supply during the maintenance period.
“Unfortunately, the continued rise in international crude oil prices is expected to result in higher fuel prices at the pump from April 2026. The under-recovery on fuel prices has been fluctuating since the onset of the conflict, and the Department will continue to monitor the situation closely. Further updates will be provided in due course ahead of the official April fuel price adjustments,” the department said.
Oil companies importing refined petroleum products from regions affected by the conflict are also exploring alternative supply sources to avoid disruptions to the domestic market.
While the government has attempted to calm fears around fuel supply, financial experts warn that rising oil prices will have significant consequences for South African households.
Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money, cautioned that consumers should prepare for financial pressure in the months ahead.
“Consumers need to tighten their belts knowing there is a high likelihood of a steep increase coming in April by avoiding unnecessary new debt and identifying non-essential spending that can temporarily be paused. Put money aside to soften the blow for the next month or two and ease the potential financial pressure,” Parry said.
She warned that the impact would extend far beyond transport costs.
“Understand that this fuel price increase will likely filter through into other areas besides just the cost of traveling. It would increase food prices, electricity costs, and affect everyday living expenses. However, proactive planning, careful budgeting, and reducing fuel dependence where possible can help soften this impact.”
Economists say the scale of the increase remains uncertain, but early indicators suggest significant upward pressure.
Frank Blackmore, Lead Economist at KPMG South Africa, said current projections show a notable rise, though some of the more dramatic forecasts may be premature.
“If I look at the over or under recovery on the fuel price, currently it is nowhere near that R5 rate. Based on Friday’s prices, petrol prices were going to increase by around R2.80 while diesel prices were slightly higher around that R5 increase mark. So, it is possible for fuel prices to increase as reported on the weekend to R8 but that would require a lot further depreciation in the rand, combined with a lot higher oil price at this point,” Blackmore explained.
He added that rising fuel costs would have a broad impact on the economy.
“There is no real way for consumers to get around this, as fuel prices will impact the movement of all goods and services and therefore this will be quite broad-based and have an inflationary impact. Currently determined that direct impact is around 1% increase in inflation, which puts us at around 4.5% for April.”
Supply chain specialists say the energy shock could also ripple through global trade and logistics.
Dr. Ernst van Biljon, Head Lecturer in Supply Chain Management at the IMM Graduate School, said the conflict has already shaken energy markets.
“The recent escalation in tensions involving the United States, Israel, and Iran has already translated into a sharp movement in energy markets. Oil prices reacted quickly, reflecting investor concerns about potential disruptions to supply and the vulnerability of key shipping routes in the Middle East.”
“For global supply chains, the implications of sustained higher oil prices extend far beyond the immediate energy sector,” he added.
Meanwhile, civil rights group AfriForum has called on Godongwana to intervene by reducing the fuel levy to cushion consumers and the broader economy.
In a letter to the ministry, AfriForum argued that the government has taken similar steps before and should do so again.
In March 2022, Godongwana, together with Mantashe, announced a temporary reduction in the general fuel levy of R1.50 per litre to provide relief to households following the outbreak of the Russia-Ukraine conflict.
“AfriForum, alongside many economists, believe this to be the appropriate approach to cushion the impact of this latest crisis of a similar nature,” said Ernst van Zyl, the organisation’s Head of Public Relations.
Van Zyl warned that the knock-on effects of rising fuel prices are often underestimated.
“People often underestimate the effect of a fuel price hike on the price of goods. Raw materials need to be transported to be turned into intermediate goods. Intermediate goods need to be transported to be turned into final goods. Final goods need to be transported to be sold to consumers. Every step becomes more expensive if the fuel price increases,” he said.
anita.nkonki@inl.co.za
Saturday Star
