Rising Gasoline Prices#
Gasoline prices in South Africa are set to increase to their highest levels in nearly four years. The Department of Mineral Resources and Energy announced that the retail price of 95-octane gasoline will rise by 14%, reaching 26.63 rand per liter in Gauteng, the country’s economic center. This price hike will take effect on May 6, marking the highest price since July 2022.
Diesel Costs on the Rise#
In addition to gasoline, wholesale diesel prices will also see a significant increase, climbing by 24%. Retailers will have the flexibility to set their own profit margins on diesel, which means consumers may face varying prices at different locations. This increase will push the wholesale cost of diesel above 30 rand (approximately $1.79) per liter for the first time.
Government Response to Rising Energy Costs#
The South African government is taking steps to mitigate the impact of these rising energy costs. The National Treasury announced an extension of a temporary reduction in the gasoline levy for an additional month. Additionally, the general fuel levy on diesel will be eliminated from May 6 until June 2. These measures were first introduced in late March to help ease the financial burden on consumers amid escalating oil prices and a weaker currency, which have been influenced by global events such as the Iran war.
Global Context#
The increase in fuel prices is not isolated to South Africa. Countries around the world, including South Korea, are also implementing measures to address the rising costs of energy, particularly following disruptions in oil supply routes like the Strait of Hormuz, a crucial passage for global oil transportation.