Iran announced on 23 April that it has collected its first revenue from tolls imposed on ships transiting the Strait of Hormuz. The move adds a new cost layer to a waterway already disrupted by ship seizures and a US naval blockade.

Why it matters

South Africa imports more than 95% of its refined fuel. Every dollar added to the barrel price flows directly to the pump. The combination of Hormuz tolls, Brent crude above $103 and a weakened rand means South African motorists face one of the largest single-month fuel increases on record in May.

The toll system

Iran’s Parliament Deputy Speaker Hamidreza Haji Babaei confirmed the first toll revenues had been deposited into the Central Bank of Iran. The charges vary by cargo type and vessel risk profile. Ships from countries Iran considers friendly pay in Chinese yuan or cryptocurrency before receiving an escort through the strait.

Analysts estimate the tolls could generate up to $20 million per day from oil tankers alone. Iran has not ratified the UN Convention on the Law of the Sea, which prohibits charging fees for transit passage through international straits.

SA fuel price projections

According to mid-month data from the Central Energy Fund, May projections show diesel at 0.005% sulphur rising by up to R8.07 per litre at the wholesale level. Petrol 93 faces an increase of R2.29 per litre and petrol 95 an increase of R2.63 per litre. Illuminating paraffin, used for cooking and heating in low-income households, faces a R6.52 per litre increase.

These projections follow April increases that already hit motorists hard. Petrol rose by R3.06 per litre and diesel by up to R7.51 per litre on 1 April. The government cushioned the blow with a temporary R3 per litre fuel levy reduction that cost R6 billion in foregone revenue.

The rand factor

The rand weakened to around R16.53 to the dollar as investors reacted to geopolitical uncertainty. A weaker rand makes fuel imports more expensive, compounding the oil price impact. The South African Reserve Bank flagged fuel-driven inflation as a key risk in its April monetary policy review.

What happens next

The Department of Mineral Resources and Energy will announce official May fuel price adjustments on 6 May. Whether the temporary fuel levy reduction will be extended beyond April remains unclear. Treasury has indicated the relief measure is not fiscally sustainable beyond one month without cuts elsewhere.