Analysts warn that the increase in fuel prices will put more pressure on already struggling consumers.

This, as another round of fuel price increases will be implemented on the 6th of May 2026.

According to the Department of Mineral and Petroleum Resources, the retail price for all grades of petrol will increase by R3. 27 cents per litre, while diesel surges by R6.19 per litre, while illuminating paraffin is set to rise by R4.22 per litre.

The retail price for 93 and 95 grades of petrol inland will go up to R26.52 and R26.63 per litre, respectively, in May.

Diesel users got the biggest shock as the price of diesel is set to be between R32.9 and R32.30 per litre, depending on the grade.

While poor households were not spared, illuminating paraffin will now cost R28.43 a litre.

LP Gas will also see an increase of R5.7, taking it to R41.12 per kilogram.

Makwe Masilela, founder of Makwe Fund Managers, says while the government tried to curb the hit on consumers, not much was spared as the market remains out of its grip.

“The government has tried to control whatever is within its powers. In this case, we are talking about taxes on fuel, and we have seen it provide some relief by postponing their implementation. However, other factors are beyond its control. In a free market, the rand operates as a floating exchange rate, which limits how much control there is over it, as well as over oil prices. South Africa is a net importer, and as a result, if the rand underperforms, we will continue to see these kinds of increases. As it stands, we know this will be inflationary.”

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Momentum Senior Economist, Sanisha Packirismy, says the increase in fuel prices acts like a tax on everyday living.

“For consumers, this is not just about filling up at the pump. We know that fuel is a key input cost across the economy, so the impact of rising fuel prices feeds through into higher transport costs quite quickly, potentially into higher food prices, and ultimately risks raising broader inflationary pressures. In effect, it acts like a tax on everyday living, and it disproportionately affects lower- and middle-income households, which spend a larger share of their income on essentials like food and taxi fares.”

The Department of Mineral and Petroleum Resources says these increases are due to the higher international oil prices as a result of the ongoing tensions between the US and Iran. Department spokesperson Robert Maake says, “The reasons are, firstly, the higher oil prices on average during the period under review, which led to higher prices of all products. Secondly, the rand was relatively stable against the US dollar during the same period. Thirdly, a slate levy of R1.23 will be implemented in the price structures of petrol and diesel with effect from 6 May. This is in line with the self-adjusting slate mechanism to deal with under-recoveries by oil companies.”

Late last month, the Finance Ministry announced the extension of the temporary reduction of the fuel levy to shield South Africans from another massive price hike. While this is much-needed relief, consumers are cautioned to tighten their belts as the increase in fuel prices will filter into the wider economy.

Rand Swiss market analyst Gary Booysen, “Looking at diesel, we are talking about a price of above R32 a litre as the official diesel price in May. Petrol, for 95, is expected to be around R26.63 a litre. It is absolutely staggering, and that is going to feed into the economy. Everything that needs to be transported will be affected, and that cost will have to be recovered in the price of final goods. As a result, consumers are going to have to tighten their belts.”

Nedbank Economist, Johannes Khoza, says the increase in fuel prices will have a negative impact on inflation. Currently, inflation is sitting at 3.1 per cent. Khoza says due to the instability in fuel prices, inflation may peak at 5 per cent in the second quarter of the year, outside of the Reserve Bank’s inflation target of 3 per cent.

Senior economist at Nedbank, Johannes Khoza, said, “Headline inflation is expected to peak at around 5% during the second quarter before easing gradually in the second half of this year. On average, inflation is expected to be about 4% in 2026. However, risks to this forecast remain skewed to the upside. Second-round effects from higher fuel prices and sustained weakness in the rand could lift inflation expectations and potentially force the central bank to lean more strongly against an inflation spiral.”

Khoza says he believes the Reserve Bank will keep the interest rates unchanged in May, while it observes the market. However, if inflation expectations start to rise and the second round effects become more broad-based, the bank could be forced to increase interest rates either in May or July this year.

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