The fuel price surge and what it means for South African businesses

The sharp rise in fuel prices is not just a concern for motorists. It has become a major economic pressure point for businesses across South Africa. As geopolitical tensions in the Middle East continue to disrupt global oil markets and threaten critical shipping routes, local companies are finding themselves exposed to rapidly increasing transport, logistics and operating costs. 3Cube Property Solutions examines the impact on South African commerce and industry – and looks at what can be done to mitigate the effects.

Rapidly escalating prices across the board

As every business owner (and everyone who owns a vehicle) is acutely aware, petrol prices in South Africa have skyrocketed in April and May, in light of tensions in the Middle East and threats to shipping through the Strait of Hormuz. To be precise, petrol has risen by more than R6.33 per litre and diesel by over R13.50 per litre, with no clear end in sight to the conflict.

What does this mean for South African businesses?

These increases feed directly into operating costs, affecting everything from production and distribution to day-to-day business activities. Higher fuel prices have far-reaching implications for South Africa’s economy, driving up logistics, wholesale distribution and retail supply costs in a country heavily reliant on road freight. As transport expenses climb, businesses are being forced to absorb higher costs across nearly every stage of the supply chain, from sourcing raw materials to delivering finished products to customers.

For many companies, this creates a difficult balancing act. Absorbing the additional costs places pressure on already tight profit margins, while passing those costs on to consumers risks reducing demand in an already strained economic environment. Smaller businesses are particularly vulnerable, as they often lack the financial flexibility, buying power or operational scale needed to cushion against sudden increases in fuel and transport expenses.

A significant impact for SMEs

Small and medium-sized enterprises (SMEs) are likely to feel the pressure most acutely. Unlike larger corporations, many SMEs operate with limited cash reserves and tighter margins, leaving little room to absorb ongoing fuel-related increases. Rising transport and commuting costs can affect staffing, deliveries and supplier relationships, while fluctuating operational expenses make budgeting and long-term planning more difficult. In some cases, businesses may be forced to delay expansion plans, reduce operating hours or reconsider pricing strategies to remain sustainable.

Why is South Africa so vulnerable to global energy crises?

According to an article penned by Hasina Kathrada for The Mail & Guardian, our vulnerability starts with the fact that we import most of our crude oil. As a net oil importer, we import more than 20 billion litres of crude oil and refined petroleum products each year – all paid for in US dollars. Adding to this, while nearly half of our crude oil imports come from Nigeria, the rest is sourced from Middle Eastern producers like Saudi Arabia. This places us in a particularly vulnerable position to disruptions around the hotly contested Strait of Hormuz.

Piling on another layer of tension is the fact that several South African oil refineries have ceased operations over the past ten years, leaving us heavily reliant on importing refined fuels. These refined products come from countries like Oman, Kuwait, Bahrain and Saudi Arabia – all of which are impacted by the current geopolitical tensions.

Companies across many industries feeling the hit

Eyewitness News quotes an interview with Dr Eric Levenstein, head of insolvency and business rescue at Werkman’s Attorneys. According to Levenstein, the increasing pressure of higher fuel bills and higher working capital needed for operations is a trigger for potential financial stress. “Bulk purchases of fuel are going to become more and more expensive for freight and logistics companies, and that’s just going to have a knock-on effect on the ability to trade.”

An opportunity to rethink and adapt

In a piece published by Logistics News, Marcus Ellappan, overland logistics director at Bidvest International Logistics, points out that the real risk lies not in the fuel price, but in how businesses respond to it. He advises decision makers to adopt a strategic approach by reviewing transport routes, consolidating shipments and evaluating distribution networks to minimise distance to market.

Over the years, companies have taken various proactive steps to overcome fuel price hikes. In 2023, Takealot started transitioning to battery-electric trucks to cut emissions and operating expenses. Similarly, in 2025, The Clicks Group and United Pharmaceutical Distributors introduced South Africa’s first fleet of pharma-compliant electric vehicles.

Data-driven fleet management and route optimisation is another avenue making a massive difference for some companies. Tied to this, fleet operators are increasingly studying route density, payloads and stop-start patterns to determine where EV adoption makes the most economic sense.

According to Nelson Teixeira, managing director of operations for Sub-Saharan Africa at FedEx, companies are building flexibility into their supply chains by developing alternative routes and sourcing options. As he told Logistics Business Africa, companies are increasingly diversifying suppliers and strengthening regional networks to reduce dependence on single routes or distant markets.

The current fuel price surge is a reminder of how interconnected global events and local business realities have become. For South African companies, rising fuels costs are no longer an occasional disruption but an ongoing operational risk. Businesses that respond proactively by improving efficiency, strengthening supply chain resilience and making smarter operational decisions will be better positioned to navigate volatility.

In an environment where operating costs and supply chain pressures are constantly shifting, strategic property decisions matter more than ever. If your business needs a home in Gauteng or Cape Town, get in touch with 3Cube Property Solutions.