South Africa gasoline prices hit record with relief rollback

South Africa’s gasoline prices are set to climb to a record this month, as the government unwinds temporary relief measures that had shielded consumers from a surge in global energy costs triggered by the conflict involving Iran. The adjustment marks a turning point for motorists already facing persistent inflationary pressure, with fuel remaining one of the most closely watched components of household spending and business operating costs.

Middle East conflict lifts oil prices

The Department of Mineral Resources and Energy said that the retail price of 95-octane gasoline will rise to R28.06 ($1.73) per liter on June 3 in Gauteng, the country’s economic hub, up from R26.63 ($1.63) per liter last month. The increase comes as the Treasury begins rolling back fuel relief measures introduced earlier to cushion consumers from rising oil prices, with the support being scaled down this month and set to be fully removed in July.

The move coincides with renewed strain in global energy markets following the war in the Middle East, which has disrupted shipping through the Strait of Hormuz, a key passage for roughly a fifth of the world’s seaborne oil and liquefied natural gas. The disruption has pushed up energy costs globally and fed through into inflation in import-dependent economies such as South Africa, where price pressures have remained stubborn since the conflict began on Feb. 28.

Inflation rises above 3 percent target

Inflation has edged away from the South African Reserve Bank’s 3 percent target, reaching 4 percent in recent readings, underscoring the difficulty policymakers face in stabilizing prices while external shocks persist. In response, the central bank raised borrowing costs by 25 basis points to 7 percent last week, signaling that further tightening could follow if conditions linked to the conflict in Iran continue to weigh on global oil supply routes and domestic price stability.

While petrol prices are moving higher, the latest adjustment offers partial relief in other fuel categories. Wholesale diesel prices will decline by as much as R3.25 per liter, while illuminating paraffin will fall by up to 7.95 rand per liter, providing some offset for industries and households that rely on these fuels for transport, logistics, and basic energy needs.