Fuel price hike expected in South Africa in October, impacting drivers

South African motorists are set to face another sharp increase in the prices of petrol and diesel as the Middle East conflict pushes global oil prices higher. In October, South Africans anticipate record prices for petrol and diesel due to tensions in the oil markets, where the price of Brent crude traded near $110 a barrel on Friday after breaking the $100 barrier earlier in the week.

Latest data from the Central Energy Fund indicates a potential rise in the price of unleaded petrol 93 by R2.02 and unleaded petrol 95 by R2.14. For diesel, increases are expected in the range of R1.71 for 500ppm to R2.05 for 50ppm. However, recent oil price fluctuations mean these forecasts are variable targets, and the situation is likely to worsen by the time final fuel prices are calculated in October.

Currently, South Africans can expect a litre of 95 ULP petrol on the coast to cost a record R28.19, and in Gauteng, R29.06. Diesel with 50ppm content, expected to sell wholesale at R31.60 in Gauteng, will exceed its previous historical high of R31.38 recorded in May. It is important to note that these are only preliminary estimates for the beginning of the month and may change significantly before the final adjustment is announced.

Rising Cost to Fill Up

These projected increases follow a significant rise in September, when the price of both fuels increased by R1.34, and diesel by between R2.94 and R3.15. This means that by October, the cost to fill a 40-litre tank with petrol will increase by at least R139 over two months, and filling a 60-litre tank will cost R209 more, based on conservative estimates. The diesel situation looks much bleaker: there has been a rise of R5.20 for 50ppm over two months, equivalent to an additional R208 for a 40-litre fill-up and a substantial R364 for a 70-litre tank—a realistic fill-up considering that most pickups have 80-litre tanks.

Since March, the cost of a petrol tank has increased by approximately R350 for 40 litres and R526 for 60 litres, while 50ppm diesel has risen by approximately R550 for 40 litres and R963 for 70 litres.

These figures have serious implications for motorists who must plan significantly more for monthly transport costs. Taxi drivers have also felt the impact of rising fuel prices in 2026. Although fares vary depending on the route and region, taxi associations have announced increases of approximately 3–6% for some urban routes and 10–30% for some intercity trips. These increases are likely to continue rising as the September and October increases stabilize.

Broader Economic Implications

The rise in fuel prices affects not only transport and travel. Food prices, interest rates, and the cost of basic goods such as food are influenced by fuel prices. Economist Lara Hodges of Investec noted that the significant fuel price hike in September will put additional pressure on already strained household budgets, and the projected increase in October will further reduce consumer purchasing power.

Hodges stated: 'Consequently, consumer sentiment is likely to remain extremely low in the third quarter, with households adopting a more cautious approach due to concerns about affordability and the overall economic outlook.'

Investec Chief Economist Annabel Bishop believes that the current oil price situation could also lead to further interest rate hikes in South Africa. Bishop emphasized: 'The persistence of the war in the Middle East and oil prices above $100 a barrel will negatively affect inflation and interest rate forecasts, making another 25 basis point interest rate hike possible this year for South Africa, although the Middle East outlook remains uncertain.'

The South African Reserve Bank (SARB) has so far maintained a cautious approach to the oil shock and its impact on fuel prices and inflation. It raised interest rates by 25 basis points in May but kept them unchanged at the MPC meetings in April and July.

Bishop added: 'At the upcoming MPC meeting this month, SARB may raise the rate by 25 bps as the oil shock has intensified again, which could affect inflation if it persists. The MPC meeting this month will take place on the 23rd, and much will depend on the movement of oil and the rand.'

SARB's policy rate in South Africa (formerly the repo rate) is currently 7%, and the lending rate is 10.5%. At the last MPC meeting, the vote was split 4–2, with two members advocating for a 25 basis point rate hike.

Impact on Food Prices

Naturally, rising diesel costs will also put pressure on food prices, although the impact on supermarket bills should be significantly less than the increase at petrol stations. According to the Road Freight Association (RFA), diesel accounts for about 35% to 55% of operating costs for trucking companies. This means the latest increase could isolate increase total transporter costs by approximately 4% to 6%, depending on their vehicles, routes, and operating conditions.

Over 80% of land transport is done by road, and the country's food supply chain relies on trucks to move products between farms, processors, distribution centers, and retail stores. Nevertheless, the indirect effect will depend on how much the additional costs are absorbed by transport operators, suppliers, and retailers, rather than being passed on.

Pressure on food prices is partially offset by conditions higher up the supply chain. Investec Chief Economist Annabel Bishop noted that South Africa is still in a period of deflation in agricultural food prices, although the potential impact of El Niño-related weather is expected to become a more serious concern by the end of the year.

However, the RFA argues that operators can use fuel adjustment mechanisms in transport contracts to recoup part of the increase, while others may absorb part of the shock by reducing margins and cash flow. Furthermore, there is a broader consumer effect. Higher fuel costs effectively reduce household disposable income, leaving drivers and passengers with less money for spending in restaurants, entertainment, clothing, and other non-essential purchases. Thus, for businesses dependent on consumer spending, the fuel shock creates a secondary risk even where fuel is not a primary direct input component.

The news is not good for drivers: fuel prices will begin to rise again next week. Calculations show an increase of 15 cents per liter of diesel fuel and 10 cents per liter of gasoline.

Thus, diesel fuel could reach approximately 2.17 euros per liter, and gasoline—2.12 euros. It is important to note that each brand and gas station can set its own price, as the fuel pricing policy in Portugal is free. ANAREC Vice President, Mafalda Trigo, explained to RTP Antena1 that this is currently only a forecast based on international markets. The final cost will be confirmed today, but everything points to a significant increase.

With the forecast of new growth next week, economist Filipe Grilo expects record prices for consumers at gas stations. The specialist explains that the reason for this is the escalation of the war in the Middle East and increased profits from oil refining. He believes that the bad news will not stop here, and another rise in fuel prices is expected next week.

Forecasts from Galp, the association representing gas stations, as well as the Portuguese Automobile Club, indicate an increase in diesel and gasoline prices by more than 10 cents starting Monday. The previous record price for diesel fuel in North America was set in 2022 after Russia's invasion of Ukraine. Now, fuel exceeds all previous highs.