South Africa’s petrol under-recovery stands at R3.52 per litre, while the diesel under-recovery stands at R6.00 per liter.
Brent crude oil prices at one point exceeded $120 per barrel, raising the risk of fuel inflation spreading across Africa’s import-dependent economies.
Petrol in Nigeria has increased to ₦1,000-₦1,300 per liter, while fuel prices in Egypt have increased by 14-17%.
African economies are bracing for a new wave of fuel inflation as global oil prices soar due to geopolitical tensions over Iran, Israel and the United States. Price shocks are already spreading to African markets, where many countries remain heavily dependent on imported refined fuels.
In South Africa, data from the state-run Central Energy Fund at the beginning of the month showed gasoline backlogs at R3.52 per liter, while diesel backlogs rose to R6.00 per liter, potentially leading to a significant increase in pump prices when the next official adjustment is announced.
This surge follows a surge in global oil markets, with Brent crude oil briefly exceeding $120 per barrel in early March amid concerns about supply disruptions related to the Iran conflict and instability around the Strait of Hormuz, a key artery for global oil transportation. Rising war risk insurance premiums and longer shipping routes are also increasing the cost of refined products arriving at African ports.
Costs rising across African markets
The effects are visible across the continent. In South Africa, fuel prices have already begun to reflect this trend in March, with inland petrol at R20.19 per liter and diesel at R18.53 per liter, as import costs rose due to higher oil prices and a weaker rand.
Egypt implemented major fuel price adjustments on March 10, raising gasoline prices by 14-17%, reaching 24 Egyptian pounds per liter for 95 octane and 20.50 Egyptian pounds per liter for diesel. Officials cited global supply disruptions, rising transportation costs and geopolitical risks as factors for the increase.
Meanwhile, in Nigeria, retail gasoline prices have soared to between ₦1,000 and ₦1,300 per liter in major cities. Dangote Refinery recently increased its gantry price from ₦774 to ₦874, while some independent distributors are charging as high as ₦1,500 per liter, reflecting currency pressures and the country’s continued dependence on imported refined products.
In other regions, weak currencies and import dependence are amplifying the shock. Ghana’s cedi has fallen to about 10.80 giga francs to the dollar and transportation costs are rising, while Tanzania has raised fuel price caps following a nearly 10% rise in global prices. Ethiopia, which imports fuel via Djibouti, has seen petrol prices rise to around 135 birr per liter, while landlocked countries such as Zimbabwe face additional logistics costs that could increase fuel prices by up to 50%.
Continent exposed to global oil crisis
The current price hikes highlight the structural weaknesses of much of Africa’s energy landscape: dependence on imported refined fuels and currency volatility. Even oil-producing countries remain at risk. Nigeria, Africa’s largest crude oil producer, remains dependent on imported refined products despite the operation of the Dangote refinery, while countries without domestic refining capacity must absorb the full impact of fluctuations in global markets.
The economic impact extends far beyond the pumps. Rising diesel prices will increase operating costs for agriculture, logistics and manufacturing, while adjustments in transportation rates will spill over into food and consumer goods markets.
Governments across the continent are trying to cushion the blow with a combination of fuel price stabilization mechanisms, tax adjustments and negotiations with transport unions, but persistently high oil prices could strain already fragile public finances.
How high can fuel prices rise?
Analysts have warned that further fuel price increases across Africa are likely in the coming months if geopolitical tensions continue and oil prices remain above $100 a barrel. In South Africa alone, the current lack of recovery suggests that petrol and diesel prices could rise by R2 to R4 per liter in the short term. Similar gains could materialize across import-dependent markets, where currencies remain under pressure.
Countries with domestic refining capacity or strategic fuel reserves, such as Nigeria and Egypt, could partially cushion the shock. However, net importing countries such as Ethiopia, Ghana and Tanzania remain highly exposed to global oil fluctuations.
For policymakers across Africa, recent price increases highlight the growing urgency of increasing refining capacity, expanding strategic reserves and accelerating energy diversification to reduce exposure to future geopolitical shocks in global oil markets.
