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(Bloomberg) — South African gasoline prices will rise to a near four-year high and wholesale diesel cost will top 30 rand ($1.79) a liter for the first time, as government interventions failed to fully offset the impact of higher oil prices and a weaker currency tied to the Iran war.
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The retail price of 95-octane gasoline is set to climb 14% to 26.63 rand per liter in the country’s economic hub, Gauteng, the Department of Mineral Resources and Energy said in a statement on Monday. That will be the highest level since July 2022.
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The wholesale cost of diesel, for which retailers can determine their own margin, will climb 24%. Increases are set to take effect on May 6.
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Countries from South Africa to South Korea are moving to blunt the impact of surging energy costs after the Iran war disrupted flows through the Strait of Hormuz, a critical artery for global supply.
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South Africa’s National Treasury last week said it would extend a reduction in the levy it charges on gasoline for another month, and scrapped the general fuel levy on diesel from May 6 until June 2. The government first announced the relief measures in late March.
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Also included in the price increases for May is a 1.23 rand-a-liter slate levy. That became necessary as the account used to balance fuel-price under- and over-recoveries with the daily fluctuations in the oil price stood at a deficit of 14.2 billion rand at the end of March, the department said.
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The increase in fuel prices will add further pressure to inflation. While the central bank targets consumer-price growth at 3%, it has already said it expects the rate to peak at 4.3% in April, from 3.1% in March.
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