Petrol and diesel prices turn higher in March as oil spike bites South Africa

Just when motorists thought the worst might be behind them, fuel prices have taken another uncomfortable turn.

Fresh recovery data for the second week of February shows petrol and diesel are now firmly pointing towards increases in March. After a brief stretch of relief earlier in the year, the pendulum has swung back the other way.

According to the latest figures from the Central Energy Fund, diesel is sitting deep in under-recovery territory, while petrol has also slipped into the red. In simple terms, that means price hikes are back on the cards.

What motorists could pay in March

Based on current projections at the end of week two in February, this is how things stand:

Petrol’s projected hike is modest for now. Diesel, however, is telling a different story, with increases nearing the 50-cent mark.

For transport operators and farmers who rely heavily on diesel, that gap matters.

Oil prices spoil the party

The rand has actually been doing its bit.

So far this year, the local currency has shown notable strength against the dollar. It traded below R15.70 to the dollar in January, moved above R16.40 in early February, and is currently hovering around R16.03.

At one point ahead of President Cyril Ramaphosa’s State of the Nation Address on 12 February, the rand strengthened to around R15.87. It later retreated as markets absorbed what many described as more of the same, with attention now shifting to the national budget on 25 February.

The currency’s performance has contributed to a positive over-recovery of about 17 cents per litre for both petrol and diesel. Unfortunately, global oil prices have cancelled that benefit out.

Oil prices began rising sharply towards the end of January amid renewed geopolitical tensions between the United States and Iran. That spike pushed recoveries for diesel deep into the red, currently sitting around minus 66 cents per litre. Petrol’s contribution has also turned negative at roughly minus 19 cents per litre.

While oil prices have eased slightly amid wider market caution and talk of a potential global crude surplus, volatility remains. Global supply is still expected to exceed demand this year, but unpredictable geopolitical developments are keeping traders on edge.

All eyes on the February budget

March may bring price hikes, but April could be even more decisive.

Motorists are watching Finance Minister Enoch Godongwana’s upcoming budget speech closely. Any changes to the fuel levy or other taxes would directly affect pump prices.

Economists have warned that if the government needs additional revenue, fuel taxes are often one of the easiest levers to pull. That possibility has sparked debate on social media, with many South Africans arguing that households and businesses are already under pressure.

There is, however, another side to the story.

Standard Bank chief economist Goolam Ballim has pointed to strong bond market performance and improved revenue collection. Research suggests the current fiscal year could see revenue overruns of around R15 billion. Lower interest costs on government debt could reduce the need for further tax increases.

But there is a caveat. If SARS undercollects, previously signalled tax measures could resurface. At the 2025 Medium Term Budget Policy Statement, Godongwana indicated that an additional R20 billion in tax measures pencilled in for 2026 would depend on revenue performance.

That makes 25 February 2026 a critical date.

Could things still change?

Fuel recoveries are close to the line. A dip in global oil prices or a stronger rand could still soften the blow before month end.

For now, though, the direction is clear. Petrol is edging higher. Diesel is climbing more sharply. And the broader conversation is shifting from March pump prices to April tax policy.

In South Africa, the fuel story is never just about oil. It is about currency moves, global politics, fiscal policy, and the everyday cost of getting to work.

Motorists will be watching every cent.

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Source: Business Tech

Featured Image: Gauteng Tourism Authority