LUNGILE MASHELE | Fuel price spike threatens economic stability

Not to be alarmist, but the government has about a week to act on energy prices, especially for the poor.

The International Energy Agency has called the war in Iran “a major energy crisis, including the largest supply disruption in the history of the global oil market”.

What is coming in April is not a routine price adjustment. It is not noise. It is a structural shock on a scale South Africa has never seen before. I am not talking about food. That comes next. What follows after that, if left untreated, is civil unrest.

Fuel in SA is not only a transport input. It is the backbone of the economy. It determines the cost of getting to work, of running taxis and buses, of moving food from farms to shelves. When fuel breaks, inflation jumps and nations fail.

SA’s poorest households already spend a disproportionate share (more than 50%) of their income on transport and energy. A fuel spike is not an inconvenience; it is a forced reprioritisation away from food, rent and schooling.

In 2022 fuel spikes directly fed into food inflation, coupled with load-shedding, which fuelled public anger and gave us the 2024 election results. The difference now is that households, municipalities and the fiscus are all weaker than they were then.

Here is the hard truth: the only energy security you can truly count on is domestic energy resources

We have limped from one crisis to the next with no recovery period in between. Load-shedding hollowed out productivity and household budgets. Covid-19 destroyed jobs and small businesses.

The Russia–Ukraine war pushed food and fuel prices higher as interest rates were rising. Now this. Each shock has reduced the country’s ability to absorb the next one. We have no resilience.

National Treasury said there is very little fiscal space left. But that is not an argument for inaction. It is an argument for speed and precision.

So, what must happen in the next week?

First: immediate targeted relief. The fastest lever is temporary relief on fuel levies or an equivalent fiscal offset, but it must be ringfenced for the poor and for public transport and food logistics, not blanket relief that mainly benefits high-consumption households.

Treasury has already acknowledged any relief would likely be temporary and limited. That’s fine. Speed matters more than perfection. Pair it with direct support to commuter transport (taxi and bus systems), and emergency protection for essentials that are most transport sensitive.

Second: diesel is the hidden escalator of inflation. It moves goods, powers backup generation and anchors input costs across the economy. If the diesel price surges, food follows through farming, processing, refrigeration and distribution.

Civil unrest does not begin with revolutionaries. It begins when economic pressure collides with institutional failure

Third: energy security is not a press statement, it is the ability to keep the lights on, goods moving and prices stable when the world explodes.

Here is the hard truth: the only energy security you can truly count on is domestic energy resources.

That means South Africa must make a sober, evidence-based choice about domestic oil and gas exploration, and about coal. Our dependence on imported liquid fuels, priced offshore and transported through global chokepoints, is an economic vulnerability by design.

The fuel price structure explicitly ties us to global refined product markets and shipping assumptions. If we refuse to develop domestic options while simultaneously lacking a credible, scaled alternative for liquid fuels, we are choosing vulnerability. And vulnerability is priced in dollars.

Civil unrest does not begin with revolutionaries. It begins when economic pressure collides with institutional failure. As British historian and philosopher Arnold Toynbee warned, “civilisations die from suicide, not by murder”.

This week is the time: immediate relief for the poor and a credible, hard‑headed plan to secure energy domestically before the next shock arrives.

• Mashele, an energy economist, is sector specialist for energy and infrastructure at the Public Investment Corporation and a member of the board of the National Transmission Company of South Africa.