Petrol and Diesel Costs Set to Surge; Families Brace for New Blow

Fuel prices will move into sharper focus this week as South Africa braces for substantial increases in petrol and diesel costs. The Department of Mineral and Petroleum Resources will announce the new prices on Monday, with the adjustments taking effect at midnight Wednesday.

For ordinary South Africans already stretched by the cost of living, the timing is acute. The state Central Energy Fund’s latest forecasts point to hefty increases for both fuels in September, following a mixed August result when petrol dropped 52 cents per litre while diesel rose by more than one rand. South Africa adjusts fuel prices monthly based on shifts in international crude markets and the rand-dollar exchange rate, with domestic prices lagging global movements by roughly a month. Seven months of geopolitical tension between the US and Iran has kept crude prices elevated throughout the year, and that pressure now threatens to push local pump prices higher still.

How businesses are reading these pressures will become clearer when the Bureau for Economic Research and Rand Merchant Bank release their third-quarter business confidence index later this week. The index slumped eight points to 39 in the second quarter after two consecutive quarters of gains, as the operating environment deteriorated due to the Middle East conflict. The sharpest pullback came in sectors most exposed to shifts in household spending, financing conditions and fuel costs. Absa economists flagged the index as a critical indicator of private sector mood, noting that “an environment of prolonged external uncertainty may keep investment growth muted, even with the modest gradual progress on growth reforms.”

Trade data will offer another window into economic performance when the South African Revenue Service publishes July balance of trade figures on Monday. In June, the trade surplus widened to R17.75 billion from R4.44 billion the previous month as exports increased by 4.3%, driven by higher shipments of vehicles and transport equipment, chemical products, prepared foodstuffs, precious metals and stones. Imports declined 2.9%, reflecting lower purchases of mineral products, vehicles and transport equipment as well as original equipment components.

Manufacturing activity remains a concern. Absa’s August purchasing managers’ index, due Tuesday, will provide fresh insight into how factories are navigating uncertainty. July’s report showed factory activity at its lowest in seven months, with the PMI declining to 46.8 points from 47.3 in June as export demand remained weak and inventory draw-downs continued. A reading below 50 signals deterioration in business conditions.

By contrast, the automotive sector showed unexpected strength in July. New vehicle sales reached 40,912 units, their highest monthly level in 12 years and a 12.5% increase over July 2025. Naamsa, the auto industry body, will release August sales figures on Tuesday afternoon to show whether that momentum has held.

S&P Global will release its own August PMI on Thursday, offering a broader view of private sector health beyond manufacturing. The index, a weighted average of new orders, output, employment, suppliers’ delivery times and stocks of purchases, stood at 50.3 in July. Readings above 50 signal improvement in business conditions; those below 50 indicate deterioration.

The Competition Commission will host its 20th Annual Competition Law, Economics and Policy Conference on Thursday and Friday, launching its first-ever Rural and Township Economy Report on the opening day and releasing the third instalment of its Cost of Living report on Friday. Together, the week’s data releases will paint a picture of how South Africa’s private sector is managing amid persistent external shocks and rising domestic costs, with the fuel price announcement on Monday setting the tone for everything that follows.