South Africa’s Petrol Price Increases by 29 Cents as Refining Capacity Collapses
South Africans are paying 29 cents more for petrol after a price increase took effect at one minute past midnight. Francis Herd and Aakash Bramdeo explain that the rise is puzzling at first glance: the rand has strengthened to just above R17 to the dollar, and the Brent crude oil price is around $63 a barrel. Under normal circumstances, this combination results in a decrease in fuel prices.
The reason for the increase lies in South Africa’s shrinking fuel-refining capacity. The country now imports most of its petrol and diesel as finished product, and the international price of refined fuel has gone up. South Africa no longer benefits from cheaper crude because it lacks the refinery capacity to process it.
Roughly half of the country’s refining capacity is offline. The major refinery that once produced 180,000 barrels per day was sold to the Central Energy Fund after shutting down. Two refineries in Durban remain closed, and the gas-to-liquids facility in Mossel Bay is also out of operation. This leaves South Africa with limited ability to refine crude oil locally, and the economy is more exposed to international price movements.
There are broader risks as well. If South Africa faced a disruption in imports, the country would not be able to meet demand with its current refining capacity. Herd notes that Nigeria faced a similar issue for years, producing crude but importing almost all its refined fuel. That changed when the Dangote refinery came online, reducing the country’s dependence on imports. South Africa has not made similar progress.
Policy uncertainty contributes to this. Delays in environmental approvals and legal challenges have slowed potential energy projects, including fracking opportunities in the Northern Cape. These projects take years to complete, and disruptions push new exploration or refining investment further into the future.
The effects of the fuel price increase reach beyond motorists. Diesel went up by 65 to 82 cents per litre, and diesel powers freight, logistics, and goods transport. When diesel costs rise, businesses pass those increases on to consumers. That adds pressure to inflation. Higher inflation increases the likelihood of interest-rate hikes, which affects households’ monthly finances.
Petrol remains cheaper than it was at the start of the year, but the 29-cent increase highlights unresolved structural issues. South Africa’s energy security is fragile. Without reliable local refining capacity, every international price movement affects domestic wallets.
The 29-cent increase may not seem dramatic on its own, but it reflects deeper challenges in energy policy, investment, infrastructure maintenance and long-term planning. Until South Africa rebuilds or expands its refining capacity, future price shocks will continue to land on consumers.