Inflation threat as diesel prices shoot up more than 11%
That may be good for Sasol and some coal producers, but freight operators - and ultimately consumers - will carry much of the cost.
Diesel prices skyrocketed by 11.35% at midnight, driven by Brent crude oil surpassing $90 per barrel due to renewed U.S.-Iran conflict. This push the wholesale price of 50ppm diesel above R30 per litre, a level not seen since May 2026 when it hit a record R31.38. Diesel prices fell by nearly 20% to R25.16 by July as global fuel prices dropped, but relief was short-lived.
South Africans now pay three times more for diesel than 10 years ago, while petrol prices increased by 5.27%, about half the diesel rise. This is three times higher than the 57% increase in consumer inflation over the same period. Gavin Kelly, CEO of the Road Freight Association, warns that the fuel price hike threatens inflation targets, potentially adding 0.2 to 0.3 percentage points to headline inflation.
Fuel accounts for 3.8% of consumer inflation, so the September increases could directly contribute to higher inflation. The indirect impact on transport costs could be significant, with transporters' total costs potentially rising by 4% to 6.2%. This increase could reverse recent inflation relief, increasing the risk of "second-round effects" such as higher prices, stronger wage demands, and rising inflation expectations.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
