Middle East War is coming for your wallet: How rising fuel prices will hit SA households

South African motorists face another sharp rise in petrol and diesel prices as the Middle East conflict pushes global oil prices higher.

South Africans are staring down the barrel of record petrol and diesel prices in October as the conflict in the Middle East has put oil markets on edge, with Brent crude having traded close to the $110 per barrel mark on Friday after breaching the $100 barrier earlier in the week.

The latest data from the Central Energy Fund indicates potential increases of R2.02 for 93 Unleaded petrol and R2.14 for 95 Unleaded, while diesel is looking set for hikes of between R1.71 for 500ppm and R2.05 for 50ppm.

What’s more, recent oil price movements mean these predictions are moving targets, with the outlook likely to get significantly worse by the time October’s fuel price calculations are finalised later this month.

But as it stands, South Africans can expect to pay a record R28.19 for a litre of 95 ULP at the coast and R29.06 in Gauteng. Diesel, with 50ppm expected to wholesale at R31.60 in Gauteng, would surpass its previous all-time peak of R31.38 in May. These remain early-month estimates and could change significantly before the final adjustment is announced.

These anticipated hikes come on the back of significant increases in September, which saw the price of both grades of fuel rising by R1.34 and diesel by between R2.94 and R3.15.

What this means is that, come October, the price of filling a 40-litre tank of petrol will have risen by at least R139 in the space of two months, while a 60-litre refuel would have risen by R209. And that’s based on conservative estimates. The diesel situation is far bleaker, with a R5.20 increase for 50ppm over two months, translating to an additional R208 for a 40-litre refuel and a substantial R364 for a 70-litre tank – a realistic refuel given that most bakkies have 80-litre tanks.

Since March, the month before the first major fuel hike, the price of a tank of petrol would have increased by about R350 for 40 litres and R526 for 60 litres, with 50ppm diesel having risen by around R550 for 40 litres and R963 for 70 litres.

These figures have serious implications for motorists, who have to budget considerably more for their monthly transport-related expenses.

Taxi commuters have also had to bear the brunt of increased fuel prices in 2026. Although fares differ by route and region, taxi associations have announced increases of roughly R3 to R6 for some city routes and R10 to R30 for some long-distance journeys. These are likely to increase further as the September and October increases settle in. IOL has reached out to the SANTACO organisation for further comment.

The fuel price increases go beyond just transport and commuting. Consumer sentiment, interest rates and the cost of basic items such as food are all affected by fuel prices.

Investec economist Lara Hodes said that September’s significant fuel price increases will place further strain on already pressured household budgets, while the projected increases in October will further erode households’ purchasing power.

“Consequently, consumer sentiment is likely to remain highly subdued in the third quarter, with households expected to adopt a more cautious approach with concerns around affordability and the broader economic outlook,” Hodes said.

Investec Chief Economist Annabel Bishop says the current oil price situation is also potentially setting South Africa up for more interest rate hikes.

“The persistence of the Middle East War and the oil price over US 100/bbl would negatively impact the inflation and interest rate outlook, and now another 25bp interest rate hike this year is possible for SA although the ME outlook is uncertain,” Bishop said.

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

“With an MPC meeting this month, the SARB may hike by 25bp as the oil price shock has flared up again, which could impact inflation if it persists. The MPC meeting this month is on the 23rd, and much will depend on oil and rand price movements,” Bishop said.

South Africa's SARB policy rate (formerly the repo rate) is currently 7%, while the prime lending rate is 10.5%. The most recent MPC meeting saw the vote split 4–2, with two members favouring a 25-basis-point hike.

Of course, spiralling diesel costs will also add to pressure on food prices, although the impact on supermarket bills should be considerably smaller than the increase at the pump.

Diesel prices account for around 35% to 55% of operating costs for road-freight companies, according to the Road Freight Association (RFA). That means the latest increase could, in isolation, raise freight operators' overall costs by roughly 4% to 6%, depending on their vehicles, routes and operating conditions.

Over 80% of land-based freight is transported by road, while the country's food supply chain relies on trucks to move products between farms, processors, distribution centres and retailers.

That said, the knock-on effect will depend on how much of the additional cost transport operators, suppliers and retailers absorb rather than pass on.

The pressure on food prices is also being partly offset by conditions further up the supply chain. Investec Chief Economist Annabel Bishop has said South Africa remains in a period of food-price deflation at the agricultural level, although the potential impact of El Niño-related weather on food production is expected to become a bigger concern towards the end of the year.

However, the RFA says operators can use fuel-adjustment mechanisms in transport contracts to recover some increases, while others may absorb part of the shock at the expense of margins and cash flow.

There is also a broader consumer effect. Higher fuel costs effectively reduce household disposable income, leaving motorists and commuters with less money to spend on restaurants, entertainment, clothing and other discretionary purchases. For businesses that depend on consumer spending, the fuel shock therefore creates a second-order risk even where fuel is not a major direct input cost.

Apart from commuting costs, general inflation and interest rates, the broader oil shock will affect many sectors of the economy, including construction and infrastructure, mining and aviation, while tighter household budgets will affect the bottom line of any business that relies on consumer spending.