Before the first missile was fired in the Middle East, Kevin Lings, Chief Economist at STANLIB, had already warned that South Africa's fuel prices were materially understated, says the writer.
Image: Independent Newspapers Archive
WHEN the government announced fuel price increases effective March 4, 2026, petrol up 20 cents a litre, diesel up 65 cents, many South Africans shrugged and moved on. They should not have. What happens at the petrol station does not stay there. It moves into your grocery basket, your electricity bill, your bond repayment, and your airfare. Every South African household is exposed, regardless of whether they own a vehicle. The full cost is only beginning to be felt.
Before the first missile was fired in the Middle East, Kevin Lings, Chief Economist at STANLIB, had already warned that South Africa's fuel prices were materially understated. The country's annual fuel inflation rate stood at minus 10.9% year-on-year in February 2026 - consumers were paying significantly less than the market warranted, and a correction was inevitable regardless of events abroad.
The under-recovery on petrol was already approximately 75 cents per litre (Moneyweb; Pretoria News, March 3, 2026). The months of price relief at the pump from January and February 2026 were, in effect, borrowed time. The Middle East conflict did not create this problem. It turned an inevitable correction into a catastrophe.
The March increases were based on Brent Crude averaging USD 69 per barrel. It has since surged above USD 100. Central Energy Fund data points to April petrol hikes of up to R4.74 per litre and diesel increases exceeding R7.73 per litre - with further deterioration possible if oil prices hold (IOL Motoring, March 17 to 18, 2026).
Lings calculates that at USD 120 per barrel, the petrol under-recovery jumps to R5.40 per litre and diesel reaches R10 per litre (Moneyweb, 12 March 2026). On top of this, the 2026 Budget adds 21 cents per litre in fuel levies from 1 April, combining the General Fuel Levy, Carbon Levy, and Road Accident Fund increases. South Africans are being squeezed from two directions simultaneously: a global oil shock and the National Treasury.
For a real-time market read on where energy costs are heading, look at Sasol (JSE: SOL). The share traded around R100 in January 2026. By March 19, 2026, it had surged to approximately R214 - more than doubling in under three months, with March alone recording gains of over 72% (TradingView, March 19, 2026).
JPMorgan upgraded Sasol from Underweight to Overweight in March, raising its price target from R94 to R209, noting that ongoing uncertainty around Middle Eastern oil production disruptions could keep energy prices elevated for an extended period (FX Leaders, March 13, 2026). When the investment community doubles a share in under three months, it is delivering a clear verdict: elevated energy costs are here to stay. For the majority of South Africans who do not own Sasol shares, the same forces driving that price higher are driving up their cost of living.
The disruption is already visible at ground level. Petrol stations across Gauteng, the Free State, the North West, the Northern Cape, and the Western Cape - including Paarl, Saldanha, and Beaufort West - have reported empty diesel pumps (Cape Town Etc, March 18, 2026; Farmer's Weekly, March 2026).
The Department of Mineral and Petroleum Resources insists national supply is stable and that consignments for March and early April were secured prior to the latest escalation. The Freedom Front Plus is not so sure, raising the pointed question: with the under-recovery on petrol at R4 per litre and diesel at R7, could stock be withheld to maximise profits at April's higher prices? (Sunday Independent, March 19, 2026).
Gavin Kelly, CEO of the Road Freight Association, puts the broader consequence plainly - higher fuel costs travel through the entire supply chain and arrive at the retail shelf, one way or another. Transport companies either raise their rates, which the consumer pays, or absorb the cost, which threatens their survival (IOL, March 16, 2026).
For those flying internationally, the impact has been immediate and severe. Emirates suspended all South African services on March 2, 2026; Qatar Airways halted operations entirely. Airports Company South Africa recorded 14 flight cancellations across Johannesburg, Cape Town, and Durban airports at the outset of the crisis (AirHelp, March 2026). As of 19 March, Emirates has restored only 60% of its network and Qatar Airways continues on a skeleton schedule.
With jet fuel costs up more than 30% since the conflict began and Gulf hub capacity severely constrained, international airfares have spiked sharply. Domestic fares are also rising, though the impact is more limited than on long-haul routes.
Diesel moves food. Every truck delivering to Checkers, Pick n Pay, Spar, and Shoprite runs on it. The Pietermaritzburg Economic Justice and Dignity Group has warned consumers to monitor food prices carefully and urged retailers to be transparent about cost-driven increases, specifically flagging imported foods such as rice as facing direct upward pressure (BusinessTech, March 19, 2026). Add Eskom's simultaneous 8.7% electricity tariff increase - which strips approximately R103.50 from the real value of the national minimum wage - and the picture for lower-income households is deeply troubling.
A basic household food basket already costs R5,383,81 per month against a poverty line of R2,635. For over 40 million South Africans living below that threshold, fuel-driven food inflation is not an inconvenience. It is the difference between eating and not eating (Africa Check, March 2026).
The Reserve Bank offers no relief. Governor Lesetja Kganyago has confirmed the bank will redraft its risk scenarios ahead of the March 26 MPC meeting, and a rate cut is firmly off the table. The repo rate remains at 6.75%, with prime at 10.25%. Investec's Annabel Bishop warns that the April fuel shock alone will add approximately 1.0% to CPI, pushing inflation toward 4.0% in the second quarter of 2026 (BusinessTech, March 18, 2026).
Morgan Stanley projects rates on hold for most of 2026, with potential easing resuming only in November (Bloomberg, March 17, 2026). For home loan holders, vehicle finance borrowers, and anyone carrying unsecured debt, there is no reprieve on the horizon.
Kevin Lings warned that a correction was coming long before the first shots were fired. The war did not change the direction - it changed the magnitude, brutally and without warning. South Africans who budget conservatively, keep their tanks topped up, and trim discretionary spending before April arrives will be better placed than those who wait for the monthly statement to confirm what the petrol gauge already has.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.