Petrol stations in South Africa, particularly in rural areas, may be forced to cut staff or shut down if fuel prices do not recover soon.
The high cost of petrol and diesel is forcing motorists to drive less, threatening the viability of many forecourts.
This is because fuel retailers in South Africa are bound by strict margins, regardless of fuel prices, so they are selling less fuel and are unable to make up the difference.
In a recent interview with Cape Talk, South African Petroleum Retailers Association chairman Henry van der Merwe explained that petrol stations are taking a beating under the current fuel landscape.
“If we sell fuel at R25 a litre, we get R2. If we sell it at R40 a litre, we get R2 because it’s a margin. That’s where the unfortunate situation comes in. When the high fuel price hits us, the litres go down,” he said.
“A lot of people are driving less, they are planning better, they are using other methods of transport because it’s part of their disposable income, and it’s hitting South Africa very, very hard.”
Forecourts have experienced a significant decline in fuel sales volume. Additionally, sales typically slow down at night, meaning some stations may move to close at those times.
“It hits us hard, specifically the smaller sites, the rural areas. Those people are phoning and saying ‘we can’t afford to stay open at night because of security risks and low litres at night’,” Van der Merwe said.
He added that rural areas are also facing a security-of-supply issue if prices do not normalise soon.
“People are talking of retrenching people because they can’t afford them, or operating shorter hours, and that, for the entire country, is not a good thing,” Van der Merwe stated.
He highlighted that there has also been an increase in motorists driving off without paying their fuel bills.
Fuel prices are high even with relief measures, which are set to disappear
Brent crude oil prices surged in the wake of the US-Iran war, rising to over $110 per barrel in the last two months.
This has led to massive increases in the Basic Fuel Price of petrol and diesel in South Africa.
In response, the government introduced a relief measure in the form of a temporary R3-per-litre reduction in the General Fuel Levy (GFL) in April.
This was later extended to May, and diesel received an even larger reduction of R3.93 per litre.
However, this measure will end in June, as half of the GFL (R1.50 per litre) will be added back to the fuel price. The rest of the GFL will be re-added in July.
The National Treasury estimates it will have lost R17.2 billion in fuel taxes between April and June 2026 due to the relief measure.
Van der Merwe noted that consumers need to take this reduction into account when looking at preliminary fuel price data provided by the Central Energy Fund.
“The petrol price is not going to decrease. It might go up by R1.40 instead of a decrease of 8 or 10 cents per litre,” he said.
“But the oil price has decreased quite a bit from last week. It’s gone down from $109 to $98. Hopefully, it keeps going down.”
However, he expects diesel prices to drop by around R2 to R3 per litre in June 2026.
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