South Africans rushed to buy fuel on Tuesday as record diesel and gasoline price hikes were scheduled to begin at midnight, even after the finance minister announced a cut to the fuel levy intended to cushion the shock. The surge in demand came as motorists anticipated higher costs tied to the Iran war’s impact on global oil and fuel prices, and as some stations struggled to keep supplies flowing.
Finance Minister Enoch Godongwana announced that the fuel levy would be reduced by 3 rand ($0.18) per liter for April. The government’s adjusted fuel prices were also already in focus after the country announced changes in March, but the Tuesday update set new expectations for what drivers would pay once the new prices took effect at 12 a.m.
The price changes laid out by Godongwana included a 7.51 rand ($0.44) increase for diesel, described by the report as the highest on record, and a 3.06 rand ($0.18) increase for gasoline. By Tuesday evening, the report said some gas stations in the east of Johannesburg were turning motorists away because they had run out of both diesel and gasoline.
At other stations, the report said only gasoline was available, leaving those seeking diesel with few options and with visible lines forming at stations that still had fuel. The distribution strains were also attributed in the report to operations and logistical delays, including dozens of fuel stations running dry and some locations starting to ration purchases.
The report said some stations imposed restrictions of between 30 and 50 liters (8 to 13 gallons per car) on fuel purchases. In a separate impact on public services, South Africa’s municipality said the bus service in Pretoria was disrupted because of fuel shortages at city bus depots.
Godongwana said the ongoing conflict in the Middle East increased risks to global energy markets and added pressure to South Africa’s domestic fuel prices. The report said the decreased fuel levy for April, after adjusted fuel prices were announced again in March, would cost the government 6 billion rand (more than $351 million) in lost tax revenue.
The report quoted Theuns Du Buisson, an economic researcher at the Solidarity Research Institute, saying the fuel increases would be devastating for consumers even after fuel levies were reduced. He said the record diesel increase would raise logistics and transportation costs, with knock-on effects on inflation in the months ahead.
Because a majority of South Africans use public transport—mainly minibus taxis and buses—the report said the impact was likely to be felt mostly by low-income households.