A motorist refuels a vehicle at a petrol station in South Africa amid rising fuel prices and increased pressure on household and transport costs. Photo: The Star

NNA News - South African motorists will pay sharply more for fuel from Wednesday after the Department of Mineral and Petroleum Resources announced increases of up to R3.33 a litre for petrol and R3.24 for diesel, adding further pressure to households and businesses.

The increases take effect on 7 October, with 93 grade petrol rising by R3.12 a litre and 95 grade petrol by R3.33. Diesel will increase by R2.84 a litre for 0.05 percent sulphur and R3.24 for 0.005 percent sulphur. Wholesale illuminating paraffin will rise by R3.58 a litre.

The department said the increases were driven mainly by higher international crude oil and petroleum product prices during the review period. “The average Brent Crude oil price increased from 87.89 US Dollars (USD) to 101 USD during the period under review,” the department said.

The increase was linked to continued US-Iran tensions, uncertainty over oil flows through the Strait of Hormuz, higher shipping costs and declining global inventories. International petroleum product prices also increased because of supply shortages.

The rand provided only limited relief. The department said the currency appreciated marginally against the US dollar during the review period, reducing the basic fuel price contribution by less than one cent per litre. 

The latest increase comes as monetary policy is already tightening in response to renewed inflationary pressures. The South African Reserve Bank raised its policy rate by 25 basis points to 7.25 percent in September. The Bank said fuel prices were rising again after moderating between June and August and warned that inflation was likely to remain elevated into 2027. “Inflation is expected to remain elevated into 2027, largely driven by fuel and services inflation,” the Reserve Bank said.

The 4.4 percent inflation figure cited in recent economic reporting refers to August, when annual consumer inflation increased from 4.3 percent in July. Statistics South Africa is scheduled to publish September's CPI figures on 21 October. 

Economists have warned that the effect of higher fuel prices could extend well beyond motorists because fuel is a key input for transport, logistics and production.

Bureau for Economic Research economist Tracey-Lee Solomon said ahead of the October adjustment that sustained oil price increases could place additional pressure on households and inflation. “The longer this continues, the bigger the impact would be on inflation,” Solomon said. 

Econometrix chief economist Azar Jammine also warned that South Africa's dependence on imported fuel leaves the economy exposed to international energy shocks. “We are an oil importer. Worse than that, we have seen a deterioration in our fuel refining capacity over the last decade, making us even more dependent on imported refined fuels than in the past,” Jammine said.

He said the effects could extend into employment and broader economic activity. “The entire economy will suffer as a consequence, and job creation will be negatively affected. At present, there seems to be very little scope for a major growth upswing,” Jammine said.

The business sector has previously warned that sustained fuel increases can raise operating costs, particularly for transport and logistics-intensive industries. Business Unity South Africa said in May that fuel price increases were placing pressure on businesses and could affect investment and employment if elevated costs persisted. 

The October adjustment also includes increases in LPGas prices, while the department said the detailed fuel price schedule for individual magisterial district zones would be published separately.

The immediate impact will be felt at filling stations from Wednesday, but the broader economic effect will depend on how long international oil prices remain elevated and whether higher energy costs begin feeding more persistently into transport, production and consumer prices.