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Fuel importers have incurred at least R56bn in extra costs since the outbreak of conflict in the Middle East in February sent the price of oil surging and created the largest and most sustained price shock since the 1990 Gulf War, with consumers bearing the brunt of the high fuel prices at the pumps.A study by the Finland-based Centre for Research on Energy and Clean Air (CREA) shows global markets have paid a steep price over the sudden oil price increase after the breakout of the conflict led to shipping disruptions through the Strait of Hormuz, imposing higher energy costs on much of the world.The study puts extra costs globally at a staggering $330bn, with South Africa accounting for at least $3.5bn (R56.3bn) of this, by conservative estimates. The CREA study looked at prices from March until August.“Fossil fuel importers paid a gross extra cost of $330bn for seaborne crude oil, oil products, and LNG [liquefied natural gas] in the six months following the strikes, against what pre-war futures markets had expected they would pay over the same period. This is the estimated gross additional cost to importers, before accounting for the additional earnings of countries that also export,” the report reads.“In absolute terms, the highest gross extra costs were faced by the EU ($78bn), China ($35bn) and India ($22bn). Among importers, the typical low- or middle-income country paid about twice as much relative to GDP as the typical high-income country.“The cost of the crisis to fossil fuel importers equalled all global investments in renewable power in 2025, on a per-month average basis.”The study lists South Africa among the top 20 countries that paid the most for the Strait of Hormuz price shock.CREA compared what importing countries actually paid for seaborne fossil fuels against the prices futures markets expected before the war. Several realised cost components are excluded from the analysis, resulting in conservative estimates.These include pipeline gas, coal, fuel oil and naphtha costs; freight rates; and any other components of consumer prices added on top of the wholesale price.“Across every fossil fuel product, this crisis is a multicar pile-up and where you land depends on what you’re driving,” says Luke Wickenden, energy analyst at CREA.“Wealthier nations, for whom paying extra is less of a burden in the short term, can absorb the higher prices. That’s not the case for lower-income countries that are far more price-sensitive. The countries best placed are the ones already in the EV lane: with fuel imports slashed, they can skirt the pile-up altogether.“Oil and gas prices have long proven to be an Achilles’ heel for both household finances and the global economy as a whole. Meanwhile, countries that invested in clean energy after past energy crises have saved billions of dollars.”South Africans are gearing up for a fuel price hike this week, with the latest numbers from the Central Energy Fund (CEF) pointing to this as a certainty.Energy prices have soared in 2026, driven by the ongoing US-Israel-Iran conflict and oil supply uncertainties about the Strait of Hormuz.While some optimism crept in during August on expectations of a peace deal being reached, nothing has materialised yet, despite repeated claims by the US that it now controls the crucial waterway.South Africa adjusts fuel prices monthly, based on changes in international oil prices and the rand/dollar exchange rate as well as other local fuel-related costs and taxes. Local prices lag global movements by about a month.The latest data from the CEF showed an underrecovery across the main fuel types sold in the country. Estimated price increases by product:Petrol 95: R1.07;Petrol 93: R0.96;Diesel 0.05%: R2.71;Diesel 0.005%: R2.92; andIlluminating paraffin: R2.12.The CEF uses the term “recovery” to denote the daily difference between South Africa’s regulated fuel price, what is paid at the pump, and the actual, fluctuating cost of importing that fuel.Since local fuel prices are only adjusted once a month, a gap typically develops between the fixed pump price and the live global market prices.In addition to a global oil market that can be swayed by a multitude of factors, local prices are subject to a battery of taxes that put further pressure on what is paid at the pump.The impact of higher fuel prices has been felt by consumers and businesses alike through the year, despite the reprieve of price drops in July.Recent earnings from a number of locally listed companies highlight higher operating costs squeezing margins.In a trading update last week, retailer Woolworth noted that group sales rose 4.3% for the 2026 financial year, with moderation in the second half due to inflation, fuel prices, and interest rate hikes.According to Angus LePine Williams, head of operations at Shiprazor, South African e-commerce is growing fast, but for most retailers the profit is not following the same curve. He said the real drain is not marketing or pricing. It is what happens in fulfillment: wrong courier costs, fuel surcharges, failed deliveries and returns nobody audits.Mobile provider MTN, which reported interim earnings this past week, noted higher operating costs for its largest business in Nigeria, where diesel accounts for up to 35% of its cost to do business.The company noted that while inflation was relatively contained in South Africa, “rising fuel and energy costs during the second quarter placed additional strain on disposable income, increasing the cost of living and reducing consumers’ discretionary spending capacity”.Business Day
