Warning over “excessive” petrol and diesel charges in South Africa

The trade union Solidarity has called out fuel companies in South Africa over “excessive overhead charges” on petrol and diesel sales.

The union claimed that certain fuel companies are adding up to R1 per litre for petrol and R3 per litre for diesel, impacting transporters and petrol stations across the country.

Fuel companies were hit hard by the oil crisis caused by the war between the United States and Iran.

Oil prices soared to over $110 per barrel between March and early April, leading to record fuel price hikes.

According to the Department of Mineral and Petroleum Resources, the official under-recoveries for April 2026 were around R6 per litre for petrol and R10 per litre for diesel.

However, the government intervened at the last minute with a temporary R3 reduction in the General Fuel Levy, which reduced the impact on consumers to R3 and R7, respectively.

While the global oil price has improved this week, thanks to the ceasefire in the Middle East, the overall trajectory for May is still in the red with additional fuel price hikes.

The latest data from the Central Energy Fund (CEF) indicates an under-recovery of R4 per litre for petrol, while diesel is under-recovered by R11.50 per litre.

While these are enormous hikes, the silver lining is that they are a significant improvement over the CEF’s previous estimates, which put the petrol and diesel increases at R8 per litre and R17 per litre, respectively.

The takeaway from all this is that fuel prices are still at an all-time high, and fuel companies are struggling to recover their daily losses, prompting the use of surcharges.

However, Theuns du Buisson, an economic researcher at the Solidarity Research Institute (SRI), said that even though surcharges are not being levied on pump prices, it is misleading to claim they will have no impact on end consumers.

He warned that transport contractors and forecourts are already struggling under market pressures and will not be able to absorb the costs.

“Transport contractors have no choice but to pay these prices, and these costs are ultimately passed on to the consumer,” he said.

The same is true of service station owners, who will raise the unregulated price of diesel to absorb the cost of the surcharges.

“In the case of petrol, where prices are more tightly regulated, this places filling stations in an impossible position,” he said.

Finding loopholes

Solidarity pointed out that fuel companies are, ironically, now looking for loopholes to get around the regulated price of petrol when they previously opposed attempts to deregulate fuel prices.

While the retail price of petrol is tightly regulated, the same cannot be said of diesel.

The government only sets the wholesale price of diesel, but the retail price is unregulated, meaning that service stations can set their own margins according to the market.

The trade union argued that fuel companies and forecourts must be held accountable for operating within existing regulations and not exploiting market conditions at the expense of motorists.

It said it would continue to apply pressure on companies that are pushing surcharges until “unfair practices are ended.”

This follows similar remarks from the Competition Commission, which warned that it would investigate service stations suspected of price gouging consumers.

The commission said there are two forms of price gouging, the first of which is “jumping the gun,” where businesses raise prices before they actually experience any cost increases.

The other form of price gouging is when businesses raise prices significantly above what the market cost increase warrants.

It warned that price gouging fuel not only impacts motorists but the economy as a whole, as it raises operating costs across the supply chain.

The commission also said it would investigate whether companies lower their prices once the oil market recovers to ensure that prices don’t remain artificially high.