South Africa could be heading for another spike in fuel prices after India introduced fresh export duties on refined petroleum products, a measure designed to protect its local market amid the ongoing conflict involving Iran.
India’s Finance Minister, Nirmala Sitharaman, revealed new charges of 21.5 rupees per litre on diesel exports and 29.5 rupees on aviation fuel, noting that the move is intended to keep enough supply available for domestic use.
This development is likely to affect countries that rely heavily on imports, such as South Africa, which obtains roughly 24% of its petrol and diesel from India.
The situation comes at a difficult time, as the country is already anticipating sharp increases in fuel costs. Wholesale diesel prices are expected to climb by more than R10 per litre (about $0.58), while petrol could rise by over R5 (around $0.29).
Experts caution that the added export tax may worsen the situation, potentially driving up inflation and transportation expenses throughout the economy.
The impact of the Iran conflict is being felt across Africa’s fuel supply chains
These restrictions follow a wider energy disruption caused by the war involving Iran and interruptions in shipping through the Strait of Hormuz, a key route for global oil movement.
Nations across Africa that depend on imported refined fuel are already experiencing the effects, including limited supply, increased shipping costs, and more unstable fuel prices.
India, a major global exporter of refined fuel, has been directing more shipments to Africa in recent months. However, the newly introduced taxes could limit supply at a time when demand is rising, increasing the risk of shortages across the region.
Reports from News24 indicate that India exported about 500,000 barrels per day of diesel and jet fuel last month, contributing to a total of 1.2 million barrels per day in overall fuel exports.
While Europe was once the primary destination, a larger portion is now being sent to Africa, followed by Asia, especially as tighter restrictions are placed on Russian crude. According to Oil Minister Hardeep Singh Puri, the export duties are meant to control rising global fuel prices.
Amid these challenges, some African stakeholders are seeking alternatives to reduce dependence on imports.
The Dangote Refinery in Nigeria is increasing production capacity in an effort to supply regional markets and lessen reliance on foreign fuel. It is widely viewed as a transformative project that could help stabilise supply if logistical challenges are resolved.
South Africa’s current exposure highlights long-standing structural weaknesses. Years of limited investment, refinery shutdowns, and policy inconsistencies have made the country more reliant on imported fuel.
The effects of the global energy crisis are already being felt, with oil shocks linked to Iran expected to push fuel prices higher at the end of the month.
Groups such as Congress of South African Trade Unions, Business Leadership South Africa, and the Democratic Alliance have urged the government to step in with relief measures, including a proposed 50% reduction in fuel levies. Appeals have been directed to President Cyril Ramaphosa and Finance Minister Enoch Godongwana.
As global pressures mount, the situation is underscoring the urgent need for stronger domestic refining capabilities and a more resilient energy framework across the African continent.