South Africans may be paying less for petrol from today, but the sharp increase in diesel prices is expected to push up the cost of transporting goods, food and other essentials within weeks, business leaders and consumer advocates have warned.
The regulated wholesale price of 0.05% sulphur diesel increased by R1.38 a litre, while 0.005% sulphur diesel rose by R1.23 a litre from today.
The increase comes despite a 52-cent-a-litre cut in petrol prices, aided by a reduction in the slate levy.
Industry groups say the diesel increase is likely to offset much of the relief from the petrol price cut because South Africa's freight, agriculture and logistics sectors rely heavily on diesel.
Road Freight Association (RFA) chief executive Gavin Kelly said the increase would immediately raise costs across the transport industry.
“Diesel typically accounts for between 30% and 50% of a road freight operator's total operating costs, so an increase of this magnitude has an immediate and disproportionate effect on the sector compared to other industries.”
Kelly said many operators, particularly smaller transport businesses and owner-drivers, had little room left to absorb the higher diesel costs.
He explained that while larger companies with fuel escalation clauses in their contracts would recover the additional costs through fuel surcharges, many smaller operators would have to either absorb the added expense temporarily or raise their prices immediately.
“The Association estimates the bulk of this increase will be quickly passed through the supply chain. Some consumers will see immediate transport price increases, whilst consumers can expect a softer creep in consumer items over the next 30 to 60 days. Prices will, however, increase, and the consumer will feel these.”
He said that because more than 80% of South Africa's goods are transported by road, food, fast-moving consumer goods, agricultural products and building materials would be among the first sectors to feel the impact.
“Consumers are likely to feel this at the till within weeks rather than months.”
The Pietermaritzburg Economic Justice and Dignity Group, which publishes the monthly Household Food Basket, warned that higher fuel costs would place further pressure on families already struggling to afford nutritious food.
“Diesel is one of the key inputs in the production process, whether it is farmers using it on their equipment during the planting season, processing or even moving items to retailers. So, any increase on diesel is most likely to have a knock-on effect on food prices.”
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The organisation said vegetables were among the food items most likely to record price increases in the coming months, while ongoing conflict in the Middle East continued to place upward pressure on global oil prices.
It warned that low-income households had exhausted any financial buffer.
“Low-income households are already battling and do not have any buffer because their wages and salaries cover transport, with the remainder of the income covering food, which in most cases does not cover the needs of family members.”
Association of South African Chambers (ASAC) chairperson Melanie Veness said commercial vehicles and heavy-duty trucks relied almost entirely on diesel, making higher logistics costs unavoidable.
“The increase in the diesel price will trigger an immediate spike in supply chain costs, as commercial vehicles and heavy-duty trucks run predominantly on diesel. This will negatively impact all businesses and the economy, as it will drive up logistics and delivery costs of inputs and outputs, putting pressure on profit margins, cash flow and consumer spend.”
Veness said farmers' reliance on diesel-powered tractors, harvesters and irrigation systems meant food prices were also likely to come under pressure.
“Small enterprises are expected to be particularly badly affected, as they are less likely to be able to absorb the additional raw material and wholesale costs, as well as inflated delivery costs. Higher transport and food costs put immense pressure on household spending, lowering customer demand for goods and services, especially those from small businesses.”
She said the government should consider reducing the fuel levy further, expanding the diesel refund system to include the logistics sector and commercial fleets, and accelerating freight rail reforms to reduce dependence on road transport.
The latest fuel price adjustments come as international diesel markets remain under pressure, with Russian export restrictions linked to the Russia-Ukraine conflict and reduced refining capacity in parts of the Middle East tightening global supply.
