Inflation threat as diesel prices shoot up more than 11%

BUSINESS NEWS - Diesel prices shot up an average 11.35% at midnight last night, as Brent crude oil broke above $90 a barrel following the outbreak of fresh hostilities between the US and Iran.

The increase pushes the wholesale price of 50ppm diesel back above R30 a litre. This level was first breached in May 2026, when the price reached a record R31.38 following severe disruption to energy supplies through the Strait of Hormuz.

Diesel subsequently dropped almost 20% to R25.16 by July as international fuel prices retreated, tanker traffic through the strait improved and the rand strengthened. However, that relief proved temporary.

South Africans are now paying three times more for diesel than 10 years ago.

Petrol prices increased by 5.27% at midnight, about half the increase in diesel. Consumers are now paying more than 120% for petrol than they did a decade ago. This compares with a 57% increase in consumer inflation over the same period.

“This increase in the price of fuel is yet another reminder of just how highly susceptible the industry is to the volatility of global oil markets,” says Gavin Kelly, CEO of the Road Freight Association (RFA).

“As fuel prices rise, transport companies, fleet operators, and freight customers must brace for the pressure on operational costs.”

Fuel price hikes threaten inflation target

Fuel has a 3.8% weighting in the consumer inflation basket. On that basis, the September increases could add roughly 0.2 to 0.3 percentage points to headline inflation directly.

The indirect impact is less certain. With fuel accounting for between 35% and 55% of road freight operating costs, the RFA’s figures suggest that an 11.35% diesel increase could raise transporters’ total costs by 4% to 6.2%.

How much ultimately reaches consumers will depend on fuel-surcharge arrangements and how much businesses absorb through lower margins.

This latest increase frustrates the SA Reserve Bank’s efforts to hold inflation to its target 3% level.

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