The official fuel price adjustments announced on Monday by the Department of Mineral and Petroleum Resources (DMPR) bring more pain for South Africans at the pumps as increases were announced across the board.
The DMPR said that from Wednesday, 2 September, Petrol (93 and 95 ULP & LRP) will increase by R1.34 per litre, while Diesel (0.05% sulphur) will increase by R2.93 per litre, Diesel (0.005% sulphur) increases by R3.14 / R3.15 per litre and Illuminating Paraffin (wholesale) will increase by R2.13 per litre.
Geopolitical tensions from the Iran-United States (US) war was one of the main drivers of the price increases, as Brent Crude Oil prices soared above $90 per barrel during the period under review.
The Russia-Ukraine War also contributed to supply disruptions from that region.
This comes despite the rand rallying to below R16 against the US dollar last week. The average Brent Crude oil price increased from $82.37 to $87.88 during the period under review.
Frank Blackmore, Lead Economist at KPMG South Africa said that while people may think the exchange rate has been favourable, international product prices have to be factored in.
Blackmore said, "The exchange rate appreciated from the local high that came just after the announcement of the South African Reserve Bank (Sarb) not increasing the interest rate, where we saw an exchange rate climbing to around that R16.90 level and it's come all the way down to around the R16 level currently and we see also the average exchange rate improving over that period."
"The local fuel price increase must be in international product prices, which have increased over this period. What's happening here is not only the oil price itself, from which both of these are refined, but also the refining costs and global refining capacity, which have meant that inflation on petrol, diesel, and other products is much higher than the inflation on oil itself. With the war between Ukraine and Russia, global refining capacity has decreased, meaning refineries are charging more to refine oil, yet capacity is not resulting in higher prices for both petrol and diesel internationally," Blackmore added.
He said that If South Africa had retained its refineries, we would have seen less increases than we're seeing now for petrol and diesel.
"This is because we would have had our own refining costs and our own refining capacity, but as it is we're procuring a large portion of our petrol and diesel from overseas these days, and that means we are subject to these elevated increases in prices.
The second issue mentioned is that, following the announcement by the Chair of the Federal Reserve of the US, Kevin Warsh, we saw a depreciation in the rand, which is to be expected based on what was said in that meeting, which indicated that US interest rates would increase at some point. Therefore, providing more return to dollar-based investments and less return to foreign investments and hence the depreciation that we experience there," Blackmore said.
"However, the big issue with fuel prices is the story around reduced refining capacity, specifically from Russia at this point, meaning prices for refined products have gone up much more than the price of oil, and therefore we feel these fluctuations month to month in our inflation," he said.
Tando Ngibe, Senior Manager at Budget Insurance said, "South African motorists have been on a roller coaster ride with fuel prices, and unfortunately, spring is bringing another increase in the cost of getting from point A to B."
Ngibe added, "It really is a case of “win some, lose some” when we consider the latest Household Affordability Index data, which showed that the average household food basket decreased by R50.72 in August 2026, compared with July. While this is a welcomed relief for household budgets, the saving can quickly be absorbed by rising costs elsewhere and this time, motorists are being asked to find more money simply to keep their vehicles on the road."
"For those South Africans who rely on their vehicles every day to get to work, take children to school or run a business, this latest increase is more than just a few extra rands and cents at the fuel station. In fact, where the average tank of fuel is around 45 litres, this means an extra R141.50 a tank for diesel and R60.30 for petrol – adding another layer of pressure to already stretched monthly budgets," Ngibe said.
ashley.lechman@nationalmg.co.za