What South Africa’s Petrol Price Increase Means for Budgets

How much did petrol prices rise in October?

A report published on October 5 said 95-grade petrol would rise by R3.33 a litre from Wednesday, October 7, taking it above R30.25 a litre ². It also reported that diesel would rise by as much as R3.24 a litre, to more than R35 a litre ².

These are the prices and increases reported ahead of the adjustment. They show the scale of the change, but do not tell us what a particular motorist will spend: that depends on how much fuel they buy and their vehicle use.

What pushed the fuel price up?

International oil-market pressures were central to the explanation in the report. Brent crude averaged more than $101 a barrel in September, while tensions involving the US and Iran and uncertainty about oil moving through the Strait of Hormuz added concern about supply ².

The Department of Mineral and Petroleum Resources also cited higher shipping costs and falling inventories, according to the report ². It described a number of wider supply pressures, including disrupted Saudi oil exports amid fighting in Yemen and damage to refining capacity amid the Russia-Ukraine conflict ².

South Africa’s fuel prices are also influenced by the rand-dollar exchange rate. In this instance, the report said the rand’s average rate against the dollar was largely unchanged ². It therefore did not identify a major exchange-rate move as a driver of this particular increase.

Why is fuel tax relief not cushioning motorists?

Temporary relief on the General Fuel Levy applied from April to June. It reduced the levy by R3 a litre for petrol and, at its peak, R3.93 a litre for diesel ¹. The relief has not been reintroduced, according to IOL’s report.

That leaves motorists facing the full General Fuel Levy: the report gives the amount as R4.10 a litre for petrol and R3.93 for diesel. It says other charges, including the Road Accident Fund levy, bring the petrol tax bill to R6.58 a litre ¹.

Economists told IOL that bringing back relief would have a cost for the public finances. The decision involves weighing that cost against the strain high fuel prices place on people and the economy ¹. The source does not report a decision or schedule for renewed relief.

How might higher fuel prices affect household budgets?

The most direct effect is at the pump: people who buy fuel pay more for the same amount. Fuel is also used to move people and goods, so increased transport costs can add pressure to businesses and prices. The sources warn of inflation risks, but do not calculate how much a household’s overall expenses will change.

IOL reported that analysts expected cumulative fuel increases to push core consumer inflation towards around 5%, and warned that higher inflation could slow economic growth ¹. The Daily Maverick also described the price rise as a risk to domestic inflation in a sluggish economy ². These are reported concerns and expectations, not a measured forecast of what each household will pay.

What remains uncertain about fuel prices?

The reports explain the pressures behind the October increase, but do not say how long the international supply concerns will last or what the next monthly price adjustment will be. They also do not establish whether the government will restore any fuel tax relief.

For readers tracking possible changes, the Department of Mineral and Petroleum Resources is the official source named in the price-adjustment reporting ². The effect on household budgets will vary, and the supplied sources do not provide figures for particular households or goods.