April's diesel price hikes could have severe economic consequences for South Africa.
Image: File
South Africa’s diesel price outlook is increasingly dire, with the latest data from the Central Energy Fund indicating a substantial price increase of R7.39 for 500ppm and R7.50 for 50ppm.
Although petrol is experiencing a less severe under-recovery, motorists are still poised to face significant hikes of approximately R4.10 for 93 Unleaded and R4.53 for 95 Unleaded.
Keep in mind, however, that these predictions are based on mid-month data, and the latest daily under-recovery numbers imply that the increases could be even more severe if oil prices don’t soften in the coming week.
A diesel price increase of more than R8 per litre and a petrol hike in excess of R5 is certainly plausible if current oil prices and rand weakness persist until the end of March. The diesel price hikes in particular will have a devastating effect on South African inflation due to elevated transport costs.
Oil prices rose again on Tuesday, March 17, as Donald Trump’s calls for allies to help secure the Strait of Hormuz were met with a lukewarm response, while Iran continued targeting crude-producing neighbours.
According to AFP, Trump called on Europe and other partners to help reopen the strait, which Iran has effectively closed, warning that refusal would “be very bad for the future of NATO.”
However, countries such as Germany, Britain, Spain, Poland, Greece, Sweden, Australia and Japan have distanced themselves from the request.
Brent Crude oil rose by more than 2% to around $100 per barrel after falling on Monday, when the International Energy Agency (IEA) indicated that more strategic reserves could be tapped if needed.
Although most significant, high crude oil prices are not the only factor contributing to April’s predicted fuel price hikes.
The final blow will be dealt by the increase in fuel taxes that was announced by Finance Minister Enoch Godongwana during his 2026 Budget Speech. From April 1, South Africans will be paying an additional 21 cents per litre in fuel taxes, following increases to the General Fuel Levy (9 cents), Carbon Levy (5 cents) and Road Accident Fund levy (7 cents).
Following the tax adjustments, drivers will be contributing a total of R4.10 per litre to the GFL and R2.25 to the embattled RAF.
95 Unleaded petrol currently costs R19.47 at the coast and R20.30 in Gauteng, where 93 Unleaded retails at R20.19. The wholesale price of diesel is currently pegged at R17.84 at the coast and R19.17 inland.
Related Topics: