Motorists are bracing for what could be the country’s largest single monthly fuel price adjustment on record on Wednesday, with Central Energy Fund (CEF) data for the period ending March 26 showing diesel cost under-recoveries running at more than double the shortfall recorded for petrol grades.
The department of mineral & petroleum resources has yet to announce the official price adjustments scheduled for April 1. However, CEF data released on Friday showed that some distillate grades are more directly exposed to Middle Eastern supply disruptions than others.
The scale of the diesel gap carries broader economic implications because diesel powers South Africa’s freight, mining and logistics sectors, meaning a large adjustment feeds through directly to the cost of goods and services.
The South African economy is affected almost immediately by supply disruptions in the Middle East because the country now refines less than 35% of the fuel it consumes domestically after the 2022 closure of the Sapref refinery in Durban. This means the basic fuel price — the government’s formula for setting what refiners and importers can charge at the wholesale level — is almost entirely exposed to the present international crude price and the rand-dollar exchange rate.
Unlike petrol, diesel prices are not regulated by the government. Fuel companies set their own rates at the pump based on what diesel costs them to source internationally.
The under- or overrecovery is the difference between the regulated pump price and the basic fuel price, derived from international markets on a given day. When that gap increases in either direction over a monthly pricing cycle, the government adjusts pump prices to close it.
The CEF’s latest data shows average underrecoveries of R10/l on 0.005% low-sulphur diesel and R9.86 on 0.05% diesel. Illuminating paraffin, relied on by millions of lower-income households for cooking and heating, carries the largest average shortfall at R11.46/l. Petrol underrecoveries are R5.76/l for 95 ULP and R5.24/l for 93 ULP.
The primary contributor to the underrecoveries is the surge in international crude oil prices since the US and Israel launched military strikes on Iran on February 28. Iran’s subsequent closure of the Strait of Hormuz removed a large proportion of global crude supply from the market.
The rand-dollar exchange rate, trading at R16.87 at the time of the CEF’s latest calculations, has amplified the impact in local currency terms.
Finance minister Enoch Godongwana’s 2026 budget included a 21c/l increase in the general fuel levy, which is set to take effect on April 1 across all grades of fuel. The DA, union federation Cosatu, Business Leadership South Africa and the Fuel Industry Association have all called on the Treasury to reduce fuel levies to cushion the impact.
Before the fuel price adjustment announcement TotalEnergies wrote to its South African retailers on March 24 suggesting they begin raising diesel prices by up to R8/l ahead of April 1, citing stock-outs driven by consumers filling up in anticipation of the hike.
The Fuel Retailers Association opposed the move, warning it could amount to double recovery, with oil companies recouping the underrecovery from consumers now and again through the slate levy mechanism later. TotalEnergies duly reversed the instruction on Thursday evening.
Earlier last week in parliament mineral & petroleum resources minister Gwede Mantashe said South Africa has sufficient fuel reserves, urging consumers not to panic buy. “Inland supply is supported by stable refining. Sasol, Sapref and the coal-to-liquid refinery in Secunda are ensuring that there is a reliable supply of energy.
“Even the Cape Town refinery maintenance shutdown will end at the end of April. That means it will add to the reliability of supply in the country,” he said.
“You will appreciate that even the Strait of Hormuz allows cargo that comes to South Africa without interruption. So that means we [should] have a stable supply over a long period.”
Additional reporting by Dennis Droppa
