JOHANNESBURG, April 1 (Xinhua) -- South Africa on Tuesday announced steep increases in regulated fuel prices, taking effect from Wednesday, marking some of the sharpest monthly adjustments in recent history.
According to the Department of Mineral and Petroleum Resources (DMPR), petrol prices will increase by 3.06 rand (about 0.18 U.S. dollar) per liter, while diesel will rise by between 7.37 rand and 7.51 rand per liter.
Meanwhile, illuminating paraffin, a critical energy source for low-income households, will face an even larger adjustment of 11.67 rand.
The price rises come amid turbulence in global oil markets, triggered by ongoing geopolitical tensions in the Middle East and disruptions to supply routes.
Depreciation of the South African rand against the U.S. dollar has further pushed up import costs, compounding the impact of the country's heavy reliance on imported refined fuels following the shutdown of several major domestic refineries.
Local media earlier reported that motorists across the country, particularly in parts of the Western Cape and Eastern Cape, had already engaged in panic buying ahead of the price increase.
More than 100 petrol stations nationwide were reported to have run dry as drivers rushed to fill up before midnight. Some service stations began limiting sales per vehicle to roughly 30 to 35 liters to manage supply.
Acknowledging that motorists may experience temporary pressure at the pumps, Henry van der Merwe, chairperson of the South African Petroleum Retailers Association, said: "We are aware of increasing reports of queues and some sites running low on fuel, particularly diesel. It is important to stress that this is not due to a shortage of product in the country, but rather a short-term strain on distribution caused by a surge in demand as consumers rush to fill up ahead of the increase."
To cushion consumers from sharp increases, authorities introduced a temporary three rand-per-liter reduction in the general fuel levy from April 1 to May 5, a move expected to provide short-term relief to motorists and businesses.
Speaking on the one-month fuel levy cut, Finance Minister Enoch Godongwana told local media that "what the government can do is to mitigate the effects for a specific period," describing the fuel price hikes as "a shock and a blow to the economy."
For ordinary consumers, the price jump translates into higher living costs, with transportation, goods prices and service costs likely to follow suit. While the temporary levy cut eases the immediate burden, socio-economic stress points persist, given limited household budgets and broader cost-of-living pressures.
The South African National Taxi Council warned of significant pressure on both taxi operators and commuters due to the rising fuel prices.
"We understand the conditions that commuters are under, as they already spend a lot on transportation costs. The increases will be communicated, and they will not be that much, as we do not want to chase away our commuters," Rebecca Phala, the council's spokesperson, told Xinhua.
Sharing a similar view, South African political analyst Sandile Swana warned that fuel price hikes would hit consumers hard, adding that fares for buses and minibus taxis are likely to rise, affecting millions who rely on them.
For the agricultural sector, local agricultural organizations AgriSA and Agbiz welcomed the government's temporary reduction of the general fuel levy, calling it "timely relief" for both producers and consumers, while urging additional measures to protect the country's food system.
"Fuel is a core input across the entire value chain, supporting on-farm production, irrigation, harvesting, processing and logistics. The relief measure will therefore help to ease immediate cost pressures and could play an important role in buffering against further food price inflation in the short term," they said.
Most commercial farms store diesel in on-site tanks because nearly all farm operations -- from tractors to processing equipment -- depend on diesel, Swana said, adding that fuel rationing could disrupt large parts of the agricultural value chain.
In South Africa, petrol prices are fully regulated by the government, with monthly retail prices set by the DMPR based on international oil prices, the rand-U.S. dollar exchange rate and domestic taxes and margins. Petrol prices are therefore uniform within the same pricing zones nationwide and include levies such as the general fuel levy and the Road Accident Fund levy.
However, diesel prices are only partially regulated. While the government publishes a monthly wholesale benchmark price, retail diesel prices are not fixed and may vary between service stations.
Diesel is also exempt from the Road Accident Fund levy and qualifies for rebates for sectors such as agriculture and freight transport, reflecting its key role in production and logistics. Therefore, movements in diesel prices tend to have broader implications for transport costs, food prices and inflation across the economy.
Noting that South Africa's strategic fuel reserves are now estimated to cover only about two weeks, Swana warned that the situation poses serious risks, requires urgent attention, and is a major concern for the country's energy security. ■