South Africans are bracing for what could be one of the sharpest fuel price increases in recent memory, as the conflict in Iran drives global oil prices sharply higher and the rand loses ground against the dollar. The combination is a familiar and painful one — but the scale of the potential move this time is significant enough to warrant serious attention.
The trigger is the war in Iran and, more specifically, the disruption to oil flows through the Strait of Hormuz, one of the world’s most critical energy chokepoints. Global oil prices have climbed from around $68 a barrel before the conflict to approximately $105 currently — a rise of roughly 54%. Simultaneously, the rand has weakened from R15.92 to R16.75 against the dollar, a depreciation of around 5%. Both variables move in the wrong direction for South African fuel prices, and their combined effect is substantial.
Frank Blackmore, Lead Economist at KPMG South Africa, says the basic fuel price is estimated to increase by around 42% in April, translating to a price roughly R5.30 higher than March for 95 Octane inland.
“This represents a 26% increase in prices to a level for 95 Octane inland that is still below the highest we saw a year or so ago at the height of inflation,” he notes.
On the question of the R8-per-litre increase circulating in weekend media reports, Blackmore urges measured interpretation. Based on prices at the end of last week, petrol was tracking closer to a R2.80 increase, while diesel was closer to the R5 mark. “It is possible for fuel prices to increase as reported to R8, but that would require a lot further depreciation in the rand combined with a lot higher oil price at this point,” he says.
What is not in dispute is the inflationary knock-on. Fuel prices do not exist in isolation — they flow through the entire supply chain, affecting the cost of transporting every good and service in the economy. Blackmore estimates the direct inflationary impact at around 1 percentage point, which would push headline inflation to approximately 4.5% in April. “There is no real way for consumers to get around this,” he says, describing the impact as broad-based across goods and services.
For households, the pressure is immediate and practical. Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money, says consumers have just under a month to act before the Department of Mineral Resources and Energy announces the official April price adjustment a few days before the monthly review on 1 April. Her advice is direct: avoid taking on new debt, identify non-essential spending that can be temporarily paused, and set money aside now to cushion the next one to two months.
Parry also cautions against viewing the increase as a fuel-only problem. “This fuel price increase will likely filter through into other areas besides just the cost of travelling. It would increase food prices, electricity costs and affect everyday living expenses,” she says. The secondary effects — higher transport costs embedded in grocery prices, logistics and services — are where many households feel the pressure most acutely, often without connecting it directly back to oil.
The official picture will only become clear closer to the end of March, and much will depend on where the rand and oil price settle in the interim. What is already clear is that April is shaping up to be an uncomfortable month for South African consumers — and those who begin adjusting their budgets now will be better placed than those who wait for the announcement.