South Africa recorded its largest single fuel price increase in history on 1 April, with diesel rising R7.51 per litre. The surge has sent ripple effects through the transport and food supply chains.
Why it matters
Fuel is an input cost for almost everything South Africans buy. The increase will push up the cost of food, public transport, and logistics at a time when inflation was already eroding household budgets. Lower-income households, which spend a higher proportion of income on transport and food, will bear the heaviest burden.
What drove the increase
According to the Department of Mineral Resources and Energy, the average Brent crude oil price rose from $69.08 to $93.67 per barrel during the review period. The spike was driven by the US naval blockade of the Strait of Hormuz, which disrupted global oil supply routes.
The rand weakened from R16.00 to R16.64 against the US dollar over the same period, compounding the fuel price impact. The combined effect of higher crude and a weaker currency produced the record increase.
What it costs at the pump
Diesel (0.005% sulphur) now costs approximately R28.62 per litre at the coast. Inland prices are higher due to transport levies. The Automobile Association has warned that if Brent crude remains above $90, a further increase is likely in May.
Broader economic impact
Economists at Moneyweb have projected that the fuel shock will add between 0.5 and 0.8 percentage points to headline inflation by June. Food prices are expected to follow within four to six weeks as transport costs work through the supply chain.
The South African Reserve Bank is monitoring the situation closely, with its next interest rate decision scheduled for May.