Fuel cost on the rise – AGAIN

Fuel prices are set to increase sharply on Wednesday night at 24h00 – basically due to higher international prices.

In addition, there will be a further 4.9c a litre increase due to the wage increase for forecourt employees as well as a 21,9c a litre for the slate levy. This will see 93 ULP/LRP: at R26.76 per litre and 95 ULP/LRP at R26.92 per litre.

Diesel will climb to R29.11 per litre 500ppm (wholesale) and R30.05 per litre 50ppm (wholesale). Every litre of fuel consumed on South Africa’s roads affects the underlying health of the country’s logistics economy. Changes in fuel prices have a far-reaching effect on the country’s supply chain, transport systems, the wider logistics industry as well as the pricing of goods on store shelves.

This increase in the price of fuel is yet another reminder of just how highly susceptible the industry is to the volatility of global oil markets. As fuel prices rise, transport companies, fleet operators, and freight customers must brace for the pressure on operational costs.

Depending on the type of operation, routes, vehicles and specific conditions of the transport leg, fuel can be anywhere between 35% and 55% of operating costs. Fuel is one of the three largest operating costs in the transport industry, thus even small price fluctuations can have significant consequences. South Africa moves more than 80% of the land-based freight via road freight (and a large amount of the general freight on rail also uses diesel) – one can understand that highly volatile fuel prices have an effect far beyond the road freight industry.

Diesel at the Heart of Freight Costs

In the coming fuel price increase, both grades of petrol will increase by 5,27% whilst diesel will increase increased by 11,23% or 11,71%, depending on the amount of sulphur – resulting in an average of 11,35% increase on the cost base of between 35% and 55% as noted above.

Diesel fuels a great majority of freight movement in the country, from line haul trucks that link ports and distribution centres to small delivery vehicles supplying local markets.

Since almost every sector depends on road freight, the changes in diesel prices have an exponential and expanded effect on the logistics industry and, unfortunately, the impact of fuel costs is inevitable.

As noted earlier, fuel is one of the biggest variable expenses and it impacts both short – and long-distance operations – it affects all legs in a logistics chain, and some transporters will now face severe cash flow constraints.

Global Pressures Shaping Local Fuel Prices

Global fuel market dynamics play an enormous role in determining fuel prices – supply and demand remains very relevant in what the (global) customer is prepared to pay for a barrel of oil, as well as the perceived shortage that drives a buying spree and thus the price for a barrel. Secondly, as oil is primarily bought with US Dollars – the value of the Rand against the Dollar plays a further (in our case) role in more expensive fuel at the pump.

Unfortunately, the majority of the petroleum products (crude oil and refined petroleum products) consumed in South Africa is imported, and this directly results in the domestic fuel cost either rising or falling.

The September increase is primarily caused by the increasing global oil prices, geopolitical concerns, and the growing instability in the global supply of energy networks.

Political turmoil in major oil producing countries has now caused increased volatility to the market, which has led to worries about possible interruptions to the major distribution and transportation routes.

Oil markets typically react quickly to geopolitical risks, pushing crude prices higher and driving up the cost of refined fuel products downstream. For an economy like South Africa that imports oil, the outcome is often inevitable: higher domestic energy prices.

The ripple effect across logistics

Again, the fuel price increase does not end at the pump price:  once fuel prices increase, the cost of moving goods from production sites to distribution centres, and finally to retailers is all exposed to price increases.

Road freight plays a crucial role in the long-distance moving of goods among ports, factories, warehouses, and retail locations.

Freight companies need to remain financially viable, and thus transport companies must choose whether to increase their rates (by a variety of factors of either full fuel price increase or a percentage thereof), or whether they have the financial reserves to withstand the increases. The latter will place pressure on cashflow and reserves. Rate adjustments are often inevitable due to the recurring fuel price strain, even if some transport operators may temporarily withstand the cost to preserve contracts and relationships with clients.

How Operators are Managing Volatility

The transportation sector has grown increasingly defined by the volatility of fuel prices, and many transport companies adjust by reducing the volume of fuel used – fleet managers lever telematics technology, fuel choice, optimal routing software, driver training, new engine / vehicle technologies, congestion and standing time minimisation / avoidance and even load sharing.

Environmentally friendly driving techniques, better vehicle maintenance, and more sophisticated logistics planning are now essential resources for controlling operating expenses. 

Fuel adjustment methods have been incorporated in several transport contracts, enabling operators to partially compensate for the rapid price changes without disrupting long term commitments. These approaches may reduce the effects of the rising fuel prices; however, they are not sufficient to eradicate them.

Navigating an Uncertain Road Ahead

The fuel price increase in September illustrates how vulnerable the country’s transport sector is to international energy trends.

Unfortunately, it is difficult to completely rule out further fuel price increases. Already the indicators are that tensions in the Middle East will continue to place pressure on fuel prices, and it is important to note that the northern hemisphere is now heading towards winter which will increase demand for fuel.

Thus, the ongoing geopolitical tension, the surge in risk, coupled with the supply and demand factor will continue to float high fuel prices and adaptability will continue to be vital for South Africa’s freight sector.

Transport companies’ strategies for navigating this increasingly unstable operating environment will continue to be shaped by limiting fuel use, enhancing operational efficiency, and preparing for unpredictability.

One thing is certain: In a country that is dependent on road freight, such as South Africa, every adjustment in the price of diesel has consequences extending past the petrol pump, it goes deep into the transport systems that keep the country running.

Gavin Kelly, CEO of the Road Freight Association

The South African Freight and Logistics Association (SAFLA) and the Road Freight Association (RFA) are jointly calling for an immediate, unified recovery plan to restore predictable cargo flow through Durban Gateway Terminal (DGT) after sustained disruption across vessel, yard, system and landside operations.

The record is stark. In July, vessels at DGT averaged some 80 hours at anchorage and 106 at berth. After the mid-August NAVIS N4 cutover, weekly throughput fell 26% and reported terminal waits reached eight to 12 days. Independent monitoring data shows average Durban port call time rising from under five days in late June to more than twelve by late August, and monthly berth calls down from 34 to 19 since May. On the roadside, the time transporters spend in the port precinct per visit has risen by more than half in three months, while Bayhead Road transit times have climbed steadily since January. The whole gateway is slowing.

The cost runs well beyond storage and demurrage: production lines waiting for inputs, emergency airfreight at a multiple of ocean cost, and trucks standing without bookings. In the 2023 logistics crisis, the GAIN Group put the cost of freight-system dysfunction at around R1 billion a day in lost output. Durban is running the same mechanisms again.

International Container Terminal Services Inc (ICTSI) assumed operational responsibility for DGT on 1 January 2026 under a 25-year partnership with Transnet, inheriting longstanding infrastructure, yard, road and rail constraints alongside pre-handover investment in 20 new straddle carriers and four ship-to-shore cranes. The question is no longer equipment purchased, but equipment available, reliable and synchronised. The NAVIS N4 transition did not create DGT’s constraints; it compounded them.

Accountability must follow the contracts: cargo owners contract with shipping lines, the lines with the terminal, and Transnet granted the concession under defined performance commitments. Transnet and the shipping lines therefore hold the standing to bring the terminal to account — and neither should pass the cost of disruption down a chain that controls none of it.

“Cargo owners and freight forwarders do not experience the port as separate institutions. They experience one chain,” says David Logan, Executive Officer of SAFLA. “If systems, straddles, slots, gates, roads or rail fail to align, cargo stops. The priority is not institutional blame. It is disciplined recovery, with clear owners, deadlines and one trusted set of numbers.”

“Transporters are carrying this crisis on their balance sheets,” continues Gavin Kelly, Chief Executive Officer of the RFA. “Fleets are standing without bookings while fixed costs run, drivers are queuing on Bayhead Road, and every standing hour ends up in the price of goods. Slot releases must match real capacity, and truck staging must be fast-tracked now. Without trucks, South Africa stops.”

The associations propose a DGT Recovery Compact built on five actions:

1.  One recovery structure — the terminal, Transnet entities, eThekwini, shipping lines, transporters, labour and industry bodies in one daily structure, with government facilitating rather than managing.

2.  A public, 30-day recovery plan — daily targets and one public dashboard: vessel waiting and berth times, crane productivity, equipment availability, system stability, yard utilisation, dwell, truck turnaround, rail evacuation.

3.  Stabilisation of systems, equipment and the yard — NAVIS Hypercare retained until cargo-flow thresholds are sustained, backed by a straddle and crane reliability programme and accelerated evacuation of long-dwell containers.

4.  A coordinated landside plan — appointment releases aligned with real capacity, published slot schedules, reasons for cancellations, disclosure of any preferential access, and fast-tracked truck staging.

5.  Fair commercial treatment — transparent prioritisation of reefers, perishables and critical cargo, and published relief processes for storage, demurrage and detention where delays lay beyond the cargo owner’s control.

The associations acknowledge DGT’s Hypercare support, storage extensions and Radar platform, and the Presidency’s involvement. What is still missing is one consolidated, independently understandable set of performance indicators.

“The Transnet–ICTSI partnership was created to change Durban’s trajectory, and we want it to succeed,” Logan says. “Success will be measured by predictable berthing, productive ship hours, reliable truck access, effective rail evacuation and cargo arriving on time. Durban needs one recovery plan, one set of trusted numbers and shared accountability. Cargo must move — and it must keep moving.”

SAFLA and the RFA stand ready to contribute member evidence and practitioner expertise to a joint recovery task team alongside DGT, Transnet, government and other industry bodies.

RFA Chief Executive Officer Gavin Kelly

SAFLA’s Executive Officer Dave Logan

Africa’s temperature-controlled logistics leaders will strengthen the industry’s shared voice when they gather at the GCCA (Global Cold Chain Alliance) Africa Cold Chain Conference at the Fairway Hotel Resort in Johannesburg, South Africa on September 2-3 2026.

The annual GCCA event is a keenly anticipated feature of the continent’s logistics calendar. It is unique in bringing together third party logistics providers with supply chain partners, customers, politicians and other key stakeholders to address pressing challenges and to discover new opportunities in temperature-controlled logistics.

Conference delegates will join GCCA President & CEO Sara Stickler and GCCA Africa Chairman Dr Newton Matope (CEO of Cold Solutions Kenya) to steer discussions in line with the conference theme, “It’s Time for Dialogue”.

GCCA President & CEO Sara Stickler says: “As Africa’s cold chain navigates ongoing regional and global uncertainty, opportunities to share insights and form new relationships at this year’s GCCA Africa Cold Chain conference are invaluable. So too is the industry’s shared voice, empowering cold chain businesses to help shape Africa’s future at a time when supply chain logistics are evolving in response to regional needs and global change.

“GCCA’s work in Africa has built a new foundation for finding solutions to shared temperature-controlled logistics challenges, for collaborating to access new opportunities, and for advocating for the industry’s needs with governments and key stakeholders. This all starts with two-way dialogue and we look forward to fortifying the shared voice of Africa’s cold chain at the GCCA Africa Cold Chain Conference 2026.”

GCCA will welcome Mohammed Mahomedy, Head of Infrastructure and Rail for Africa at DP World, as the conference’s keynote speaker. He will take to the conference main stage on September 3 to share insights into DP World’s approach to integrated logistics at scale, in practice.

Main stage sessions and panel discussions will be delivered throughout the conference by a high quality rostrum of renowned experts including:

• Chris Hattingh, Executive Director, CRA (Centre for Risk Analysis) onthe business trading climate in Africa and the role of geopolitics
• Dr. Martin Cameron, Managing Director, Trade Research Advisory (Pty) Ltd on how trade policy meets reality
• Dr. Juanita Maree, CEO, SAAFF (Southern African Association of Freight Forwarders) discussing freight forwarding in a new era of dialogue
• Dr Ikechukwu Opara of the University of the Western Cape exploring sustainable food systems
• Cassandra Potteiger, Head of Strategy, Marketing and Communication at SA Harvest on people and partnerships.

Find out more and register to attend at www.gcca.org/events/gcca-african-cold-chain-conference/.