South African consumers are facing a financial storm as fuel prices are set to rise in May, exacerbating the ongoing cost-of-living crisis and food inflation, with no relief in sight from interest rate cuts.
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South African consumers have begun navigating the rough terrain ahead financially as the cost-of-living crisis is about to spike, with further fuel price increases set to kick in for May, food inflation begins to tick upwards, with no signs of relief coming in the form of an interest rate cut later this week.
Despite government’s extended fuel levy relief experts and trade unions have warned that it will not be enough to shield workers and the economy from a looming price shock driven by global oil market turmoil.
With concerns that there is no viable way to reopen the Strait of Hormuz, the international oil price climbed to highs of $111 per barrel this past week.
With oil prices edging higher, it can only point to another fuel price increase for South Africa in May.
Neil Roets, CEO of Debt Rescue told Business Report that another increase in fuel prices should put the country on red alert.
Roets said, "Even though the expected hikes have moderated from earlier in April, the reality is that consumers are still facing a significant increase, which many households simply cannot absorb at this time."
Data from the Central Energy Fund showed an under recovery of R1.76 for 93 Unleaded petrol and R2.09 for 95 Unleaded.
Predicted price increases indicated that South Africans should be looking at a petrol price increase of around R1.85 per litre.
The diesel situation is far more dire.
Although the under-recovery is significantly smaller than it was at the beginning of April, when some were predicting an increase of R10 or more, diesel customers are still facing a diesel increase in the region of R5.40 in May.
"Oil prices have surged again amid concerns of renewed military escalation in the Middle East, including recent developments in the Strait of Hormuz. For a country like South Africa, which is heavily reliant on imported fuel, this volatility translates directly into higher costs at the pumps," Roets said.
"Asking consumers to once again “brace” for impact is simply not realistic. Most households have already run out of room to adjust their budgets. They are hanging on by a very thin thread," the Debt Rescue boss said.
Adding to the stress of consumers on their monthly budget, data from the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) on the household food basket has shown the early effects of rising fuel prices on consumers.
The April 2026 Household Affordability Index revealed that despite a general easing in food price inflation over the past several months, the latest figures reveal a significant month-on-month increase.
The April Household Food Basket rose by R123.56 (2.3%), bringing the total cost to R5,452.09.
"With around 70-80% of fuels imported, and diesel accounting for a significant portion of this, the pressure is mounting on consumers. Currently, only two of South Africa's once six crude oil refineries are operational, creating a precarious reliance on external markets. This scenario raises questions about stability, particularly as diesel prices at the pump are not regulated, leading to unpredictability for consumers and businesses alike." Mervyn Abrahams, Programme Coordinator at PMBEJD said.
Frank Blackmore, Lead Economist at KPMG South Africa told Business Report that consumers looking for some relief in the form of an interest rate cut from the South African Reserve Bank (Sarb) is less likely and predicted the central bank would leave the current rate unchanged.
While the Sarb's Monetary Policy Committee is set to deliver its verdict at the end of May, a lot could change during the month.
Blackmore said, "Other goods were also affected, such as aluminium, helium, fertilizers, and products due to the blockages in the Strait of Hormuz and therefore the shortage in supply for a lot of those goods to global markets. If this war continues for a long period of time, for nine to 12 months minimum, then we could expect second round effects, such as price increases that run through the market, and the South African Reserve Bank (Sarb) would want to prevent that, and would be pressured to increase interest rates."
"With the bank keeping rates constant at their previous meeting, we know that rates are therefore slightly restrictive where they are at the moment, and therefore there's no further reason to increase those rates unless the bank sees this war continuing for a longer period of time," Blackmore said.
"We've seen pre-war inflation very close to the bank's forecast of 3%, even if inflation increases to 4% and above in April and potentially in May, as long as the war in ends, reasonably soon, perhaps this month or next, we will see that inflationary spike starting to return towards the new target of the bank, as oil prices come down, fuel prices come down through the economy," Blackmore added.
Blackmore said, "Therefore, I would expect at the next meeting no further action from the bank at this point, given the uncertainty, but also the intent for everyone to put an end to this war at this point."
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