South Africans are heading into April facing one of the most severe fuel price shocks in recent memory. The latest data from the Central Energy Fund (CEF) confirms that underrecoveries on fuel have ballooned to levels that could push diesel prices up by nearly R9 per litre when the new rates kick in on 1 April 2025.
The ripple effects are expected to go far beyond the fuel pump. Transport and production costs will rise sharply, threatening to trigger a broader wave of inflation that could stall — or even reverse — the country’s fragile interest rate-cutting cycle.
Record Diesel Hike Could Reshape South Africa’s Economic Outlook
According to CEF’s most recent figures, covering the three-week period up to 19 March, the underrecovery on 95-octane petrol stands at R5.20 per litre. For wholesale diesel with 0.05% sulphur, the gap has surged to R8.52 per litre, and for the 0.005% sulphur variant, it reaches R8.63 per litre.
With fuel levies also climbing by 21 cents per litre from 1 April, the total expected increase translates to R5.41 per litre for petrol and up to R8.84 per litre for diesel — figures that would represent an all-time record for local pump prices.
Despite the dramatic jump, petrol prices would only reset to levels last seen in October 2023. That context, while sobering, does little to ease the immediate financial pressure facing households and businesses alike.
Duncan Pieterse, deputy director-general of the National Treasury, told Bloomberg this week that government has very limited room to cushion the blow. Suspending the levy increase would offer only marginal relief compared to the sheer scale of the underrecoveries. The government’s last major fuel tax intervention came in 2022, when it temporarily cut levies by R1.50 per litre in the wake of Russia’s invasion of Ukraine — a move that has not been repeated since.
Paraffin, which carries no levies, faces an even steeper theoretical increase of R10.58 per litre under current market conditions, adding pressure on lower-income households that rely on it as a primary energy source.
Investec chief economist Annabel Bishop warned that the impact would extend well beyond what consumers pay at the pump. She pointed out that petroleum-based inputs feed into a vast network of industries — from fertilisers and agri-chemicals to plastics, pharmaceuticals, synthetic fibres, industrial solvents, and automotive parts. Price increases in these sectors would compound inflation across the broader economy, with second-round effects that the South African Reserve Bank’s Monetary Policy Committee is expected to monitor closely from mid-year onwards.
The rand’s recent slide has made matters worse. The local currency dropped 5% against the dollar in just the first three weeks of March, touching a low of R17.09 to the dollar on Thursday before recovering slightly to R16.91 on Friday morning. That weakness contributed between 43 and 66 cents per litre to the fuel underrecoveries for April.
Oil prices have also surged dramatically. Brent crude climbed 52% over the three-week tracking period, trading close to $120 per barrel on Thursday — and remaining above $100 for more than a week. On Friday, prices steadied somewhat after Israeli Prime Minister Benjamin Netanyahu signalled that Iran had lost its capacity to enrich uranium or produce ballistic missiles, with Nedbank analysts noting the comments were seen as a possible off-ramp for market tensions.
There is still a narrow window before April’s prices are officially locked in. Fuel prices will be set on 26 March, with changes taking effect on 1 April. A meaningful rand recovery or a pullback in global oil prices in the coming days could marginally reduce the size of the hikes — but economists are not holding their breath.
Currently, 95-octane petrol sells for R20.30 per litre in Gauteng and R19.47 at the coast. Diesel (0.05% sulphur) is priced at approximately R18.34 in Gauteng and R17.71 at the coast, with retail diesel prices remaining unregulated.
For South African consumers and businesses, the message is clear: the financial squeeze arriving in April is not a minor adjustment — it is a structural shock that will test household budgets, business margins, and the country’s monetary policy response in equal measure.