The fuel crisis caused by the US and Israeli war on Iran continued to deteriorate this week, leading to expected record-breaking fuel hikes for South African motorists when prices are adjusted on April 1.
But a plan for the diesel price increase to have come into effect earlier at certain fuel retailers has been stopped.
On March 24 TotalEnergies sent a letter to its South African retailers suggesting they gradually increase the retail price of diesel this week to the anticipated price increase on April 1, in response to heightened consumer demand. It suggested that TotalEnergies stations increased their diesel retail price by R8/l over three days this week in a bid to avoid potential stock-outs.
The move was in reaction to heightened diesel demand experienced as motorists filled up in the run-up to next week’s hikes, which had led to some sites briefly running dry.
Yesterday, TotalEnergies backtracked on the idea after opposition by the Fuel Retailers Association, which had sent a letter to the department of mineral resources and petroleum requesting clarity on diesel price adjustments.
This ‘double-dipping’ not only burdens consumers unfairly but also renders retailers uncompetitive, as they cannot absorb or justify these increases to motorists
— Reggie Sibiya, Fuel Retailers Association CEO
Reggie Sibiya, CEO of the association, said the slate levy was a self-adjusting mechanism that compensated oil companies for delays in adapting to volatile international fuel prices and exchange rate fluctuations.
The levy was designed to manage the difference between the actual fuel price and the regulated pump price, acting as a buffer for oil companies when they face losses from high, unpredictable price swings.
“If oil companies recover price increases directly from motorists now, and then also receive a slate adjustment two months later to recover the same under-recovery, it implies they would effectively be recovering twice for the same cost,” said Sibiya in the letter.
“This ‘double-dipping’ not only burdens consumers unfairly but also renders retailers uncompetitive, as they cannot absorb or justify these increases to motorists.
“These instructions place an unfair burden on retailers, who face customer backlash for price increases they did not initiate. Where diesel stock was procured locally at earlier lower costs, passing on unjustified increases, especially where a slate adjustment may follow, may constitute an abuse of market position,” he said.
“Without transparency on the cost build-up and its interaction with the slate mechanism, retailers cannot verify whether these adjustments are legitimate.”
TotalEnergies did not respond to TimesLIVE’s request for comment, but Sibiya confirmed on Thursday evening that the company had reversed its R8 price increase with immediate effect.
The DA, Cosatu, Business Leadership South Africa and the Fuel Industry Association have all called for the Treasury to slash fuel levies and provide immediate relief for households bracing for the steepest monthly fuel jump yet
Some TotalEnergies sites had increased their diesel prices up to R28/l on Thursday, according to media reports. When TimesLIVE visited a Johannesburg TotalEnergies station on Friday morning, the price of 0.005% diesel was R21.69.
Unlike petrol, which has a regulated pump price, only the wholesale price of diesel is set by the government. This means fuel station owners are allowed to set their own diesel retail prices, resulting in variations between stations.
The diesel price is set to rise by over R10/l next week based on the latest calculations by the central energy fund as of March 25. At current international fuel prices and the rand trading at R16.87 to the dollar, the CEF reports an average under recovery of R10/l for 0.005% low-sulphur diesel and R9.86/l for high-sulphur 0.05% diesel. Petrol prices are set for smaller hikes of R5.76 for 95 unleaded and R5.25 for 93 unleaded.
On top of this will be a 21c a litre increase in the general fuel levy, announced by finance minister Enoch Godongwana in his 2026 budget speech. This means the wholesale price of diesel 0.05% looks set to soar from R18.60 to a historic high of nearly R29/l, which will be even higher with the retail markup included.
Petrol 95 currently retails for R20.30/l, so a R6 hike would translate to a price of over R26.30 in April, approaching the record high of R26.74 in July 2022, which was driven by the global energy crisis following Russia’s invasion of Ukraine.
The DA, Cosatu, Business Leadership South Africa and the Fuel Industry Association have all called for the Treasury to slash fuel levies and provide immediate relief for households bracing for the steepest monthly fuel jump yet.
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