JOHANNESBURG, Gauteng — South Africans are bracing to pay more than R30 a litre for petrol for the first time in the country’s history, while diesel prices are simultaneously tracking toward their own all-time high. Month-end data from the Central Energy Fund points to increases exceeding R3 per litre across most fuel grades, with no indication yet of government intervention to cushion the blow at the pump.
The steep hike, expected to take effect on Wednesday, arrives even though crude oil dipped below $100 a barrel just days ago — a disconnect that underscores how the crisis has evolved well beyond a simple oil price story. According to Energy and Commodities Market Analyst Valentino Chigwedere, what the world is now confronting is a physical disruption in the flow of refined commodities, particularly diesel and other middle distillates, driven by a convergence of geopolitical shocks and infrastructure damage spanning multiple continents.
A Chain of Global Supply Disruptions
The pressures feeding into South Africa’s fuel price are layered and far-reaching. Russia has extended its diesel export ban through the end of October, removing one of the world’s largest diesel exporters from the international market. In the Middle East, refinery infrastructure — including the Jazan refinery — has sustained damage that continues to hamper output. China, another major fuel supplier, has pulled back on exports, tightening available volumes further.
Geopolitical flashpoints have compounded the supply squeeze. Disruptions around the Strait of Hormuz were already unsettling markets before Houthi attacks in the Red Sea extended the turmoil to the Bab el-Mandeb Strait, creating cascading bottlenecks in global shipping lanes critical to fuel distribution.
“The most important thing to realise is that what’s happening currently in the international market is that we are facing a physical flow disruption of commodities such as diesel,” Chigwedere said. “What’s affecting that is refinery closures, damages happening in Russia, and also the damages at the Jazan refinery in the Middle East.”
The result, he noted, is that the global price of diesel relative to crude has reached levels never seen before.
How Gulf Disruptions Hit South Africa’s Pumps
While much of South Africa’s crude oil is sourced from West Africa, the picture for refined diesel is starkly different. Chigwedere explained that roughly 50% of diesel imports into Africa originate from the Gulf region, with approximately 40% of that volume coming from Saudi Arabia alone. Any disruption in that corridor reverberates directly through East and Southern African markets.
In September, Saudi Arabia’s east-to-west pipeline — a critical piece of infrastructure designed to divert crude oil from the Strait of Hormuz to the Red Sea — was disrupted, triggering a spike in product prices across the region. Combined with Russia’s position as one of the world’s largest diesel exporters, any impairment to Russian refinery capacity feeds directly into global diesel pricing, including at South African fuel stations.
Shifting Procurement Patterns and the Dangote Question
The supply crunch has forced Southern and East African buyers to fundamentally rethink where they source refined products. Chigwedere said the region has increasingly looked eastward, procuring diesel from Asian refiners in Singapore and India, as well as from the United States, which remains one of the world’s biggest diesel producers.
The economics of procurement are driving these decisions. Buyers are gravitating toward refineries that offer the most competitive discounts on diesel cargoes. While one international commodity trader did bring a vessel from Nigeria’s massive Dangote refinery in West Africa a few months ago when disruptions first began, the pricing structure for middle distillates has made that route less attractive on a consistent basis.
“We should be looking closer to home,” Chigwedere acknowledged, referring to the Dangote refinery’s potential role. “But at the end of the day, it’s all about what is the most competitive price that we are able to procure to ensure that consumers are safeguarded by the pricing of diesel locally.”
The Rand’s Limited Shield
South Africa’s currency offered some relief in September as the rand strengthened against the US dollar, a factor that typically eases imported fuel costs. The country’s basic fuel price formula incorporates both international product pricing and the dollar-rand exchange rate, meaning a stronger rand can partially offset rising global prices.
However, Chigwedere cautioned that the currency gain has not been nearly enough to counteract the scale of the supply-side shock. Because petroleum cargoes are purchased in dollars and the market is already severely constrained by export restrictions from both China and Russia, the strengthening rand has provided only marginal alleviation against a much larger pricing headwind.
Sasol’s Strategic Role and Rising Shares
Domestically, Sasol’s operations have taken on heightened significance as South Africa grapples with the consequences of having shuttered half of its own refining capacity. Sasol operates both the Natref refinery and the Secunda facility, the latter being one of the world’s largest commercial coal-to-liquids fuel manufacturing plants.
Chigwedere highlighted Secunda as a critical pillar of South Africa’s energy security, noting that it allows the country to produce liquid fuels from domestic coal reserves rather than relying entirely on imported crude oil. This domestic production capability has provided a measure of supply resilience during the global crisis.
For Sasol investors, the global pricing environment has delivered a significant upside. Because South Africa’s fuel pricing mechanism is linked to international product benchmarks, Sasol benefits from elevated global prices while sourcing its feedstock — coal — locally. This dynamic has driven a substantial rise in the company’s share price and dividend returns.
Government Response: Strategic Stocks and Sapref Revival
On the policy front, the government has gazetted a draft strategic stocks plan aimed at building up both crude oil inventories and refined product reserves within the country. The plan is designed to create buffer stocks that can be released into the market during periods of geopolitical risk and supply disruption.
In a separate but related development, a state-owned entity has announced plans to revive the Sapref refinery in Durban and dramatically expand its capacity from 180,000 barrels per day to 480,000 barrels per day. Chigwedere described this as a critical step toward restoring downstream resilience and safeguarding national energy security, arguing that maintaining adequate domestic refining capacity is essential to keeping value within the country and mitigating the impact of global pricing shocks.
The government had earlier in the year implemented a tax relief measure to ease fuel costs, but no further relief has been signalled ahead of the latest increase.
Uncertain Outlook and the Diesel Economy
Looking ahead, the trajectory remains deeply uncertain. Chigwedere referenced analysis from JP Morgan, where analysts have acknowledged they can no longer reliably predict the course of the ongoing conflicts. What was initially expected to resolve within months has now stretched to seven months of sustained impact, with the Russia-Ukraine war continuing to affect energy markets and the Red Sea disruptions only emerging as a major factor in September.
For consumers, the implications differ sharply between petrol and diesel. While petrol users can adjust their driving habits and reduce kilometres travelled, diesel is woven into the fabric of the broader economy. Industries from logistics and mining to manufacturing depend on diesel, meaning sustained price increases will feed directly into inflation across virtually every commodity and service South Africans rely on.
“Diesel is the lifeline of the economy,” Chigwedere said. “Diesel prices affect each and every commodity that we utilise, from logistics to mining to manufacturing.”
Over the next 90 days, Chigwedere advised consumers to monitor developments in the Middle East and Russia closely, while also watching for any new government policy interventions, including potential tax relief measures. With the Strait of Hormuz still under threat and conflicts showing no signs of resolution, the pressures bearing down on South Africa’s fuel prices appear far from over.
