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South Africans have felt the impact of fuel price increases once again. While there may be occasional relief in the months ahead, the bigger picture is clear. Fuel price volatility is something businesses will need to actively manage for the foreseeable future.
For commercial operators, this is not just a cost line item. It is a structural pressure that directly affects margins, operational efficiency and long-term planning. From a Fleet Management and Leasing perspective, the conversation is shifting. Businesses are moving from simply absorbing fuel increases to actively managing them.
“Fuel price increases are often seen as a short-term shock, but in reality, they reflect deeper global dynamics that South Africa has very little control over,” says Andisiwe Nikelo, CEO of WesBank Fleet Management and Leasing. “For commercial fleets, that means fuel can no longer be treated as a variable cost alone. It needs to be managed as a strategic risk.”
What is really driving the fuel price
At the core of the fuel price is the Basic Fuel Price, largely determined by international factors such as global oil prices, shipping costs and the rand-dollar exchange rate. Because South Africa imports most of its fuel, it remains highly exposed to global disruptions.
“Ongoing geopolitical tensions have disrupted global oil supply, and instead of stabilising after the initial shock, prices have remained elevated and unpredictable,” says Avhapfani Tshifularo, CEO of the Fuels Industry Association of South Africa. “For a country like South Africa, which is heavily reliant on fuel imports, this creates ongoing vulnerability to international market shifts.” Currency weakness adds further pressure. Even when global oil prices soften, a weaker rand can limit any local relief. “Even in periods where global oil prices decline, a depreciating rand can keep domestic fuel costs high,” Tshifularo adds.
On top of this, regulated costs such as the General Fuel Levy, Road Accident Fund levy and carbon tax continue to shape the final price. “People often assume fuel prices are purely about oil,” Nikelo explains. “But for businesses, especially those running fleets, there are multiple layers to the price and very few of them are within their control.”
From cost pressure to operational risk
For commercial fleets, fuel volatility is no longer just about higher monthly spend. It is becoming an operational risk that affects pricing, delivery timelines and customer commitments. “Fuel price instability is no longer occasional. It has become a continuous, systemic risk that businesses need to actively manage,” says Tshifularo.
South Africa’s reliance on imported fuel, combined with limited strategic reserves and ongoing exchange rate pressure, means this volatility is likely to persist. Geopolitical instability continues to compound the issue. “Conflicts such as the Russia–Ukraine war and tensions involving Iran can disrupt global oil supply and drive price volatility,” he says. “At the same time, exchange rate fluctuations and global supply decisions add further uncertainty.”
At the same time, inefficiencies in how fuel is distributed locally can create additional pressure, particularly when demand spikes or supply chains are constrained. “In many cases, shortages are not due to a lack of fuel, but rather constraints in how efficiently it can be distributed when demand increases suddenly,” Tshifularo notes.
“This is where businesses need to shift their mindset,” Nikelo continues. “You cannot control the price of fuel, but you can control how efficiently you use it.”
Why fleet management matters more than ever
In a high-cost, high-volatility environment, fleet management becomes one of the most effective ways to control fuel spend, yet it is still underutilised by many businesses. Fleet Management and Leasing is not just about financing vehicles. It is about giving businesses the tools, data and insights to run their fleets more efficiently.
Key practices that are making a measurable difference include:
- Route optimisation using telematics and data to reduce unnecessary mileage and improve delivery efficiency
- Managing driver behaviour such as speeding, harsh acceleration and idling
- Choosing the right vehicles for the job
- Keeping vehicles well maintained
- Monitoring fuel usage to identify inefficiencies or misuse
For many businesses, these are practical changes that can deliver real savings without major disruption. “Visibility is critical. Once you understand how fuel is being used across your fleet, you can start making smarter decisions that reduce waste and improve efficiency,” Nikelo says.
The growing role of electrification
Electrification is starting to enter the conversation for commercial fleets, even though adoption in South Africa is still at an early stage. Electric vehicles reduce reliance on fuel, which can help businesses limit their exposure to ongoing price increases over time. That said, the shift needs to be practical. For example, electric vehicles may be better suited to urban routes where distances are predictable and charging is more accessible. Looking at total cost of ownership, including fuel savings, maintenance and lifecycle costs, gives a more accurate picture than focusing only on the purchase price. “Electrification is not a silver bullet, but it is part of the long-term solution,” she says. “For some fleets, even a partial shift can start to reduce exposure to fuel price risk.”
The knock-on effect across the economy
Fuel costs continue to affect the broader economy, particularly in sectors that rely heavily on transport and logistics. Diesel remains a critical input for industries such as mining, manufacturing and freight.
As costs increase, they move through the value chain and contribute to higher prices overall. For commercial operators, managing fuel efficiently is not just about protecting margins, but about staying competitive.
Building a more resilient system
There is also a role for industry and policy in improving how the system functions. In the short term, this is less about building new infrastructure and more about making better use of what already exists. “Improving coordination across storage and distribution, as well as better visibility of available fuel, can significantly reduce pressure during periods of volatility,” says Tshifularo. “In many cases, the challenge is not supply, but how effectively that supply is managed and moved.” Practical solutions such as repurposing existing infrastructure and ensuring reliable operation of pipelines and terminals can help ease pressure without requiring major new investment.
Looking ahead
Fuel price pressure is unlikely to ease in a meaningful way any time soon. For businesses, the focus needs to shift from reacting to managing. Fleet Management and Leasing provides a practical way to do this by enabling smarter, more efficient operations. “While we cannot control global oil prices, we can control how we respond to them,” Nikelo concludes. “For businesses, that response starts with understanding their fleet and using that insight to operate more efficiently every day.”
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