The Competition Commission of South Africa has warned businesses against exploiting rising oil prices as global markets react to the ongoing conflict in the Middle East.
Oil prices have surged above 100 US dollars per barrel in recent weeks, a development expected to drive up local fuel costs and place additional strain on consumers.
Commission spokesperson Siyabulela Makunga says the situation creates conditions for potential abuse.
“The war in the Middle East has caused an inevitable surge in global oil prices.
While this is expected to raise the cost of fuel in South Africa, there is a distinct risk that unscrupulous businesses will exploit the sudden surge and uncertainty in fuel prices by engaging in price gouging,” said Makunga.
Sectors Under Scrutiny
He noted that the risk is particularly high in fuel-dependent sectors such as diesel, aviation fuel, fertilisers, plastics, transport, and logistics, as well as food production and delivery services.
Makunga emphasised that businesses must comply with strict legal guidelines when adjusting prices.
“Businesses may not increase prices in anticipation of future fuel cost increases.
They may only increase prices once they experience actual cost increases,” he explained. “In effect, product or service margins after the surge should be no higher than the margins prior to the fuel price increase.”
He added that prices should also decrease as soon as costs come down: “Once fuel costs decline, product or service prices should decline immediately.”
Broader Economic Impact
Meanwhile, Ernest North, co-founder of Naked Insurance, says motorists should prepare for rising costs. “The conflict in the Middle East has caused a shock to oil supply and sent prices soaring. Prices may increase further if the
war intensifies, and even if it ends soon, it may still take time for oil prices to normalise.”
He warned that the impact will extend far beyond the petrol pump. “Apart from higher prices at the pump, the increase in oil prices could also cause prices of other goods to rise and may prompt the Reserve Bank to increase
interest rates.”
North advised consumers to review their budgets carefully.
“You need to look beyond the purchase price or monthly car repayment. Insurance, fuel, unexpected repairs, and routine services and maintenance also need to be considered.”
Awaiting Official Confirmation
Data from the Central Energy Fund (CEF) indicates that petrol could increase by between R5.17 and R5.72 per litre, depending on the grade, a jump that would represent a historic and record-breaking increase for South African
motorists.
This surge is being compounded by a weakening Rand, which has slipped against major currencies as investors seek safety amid geopolitical uncertainty, making the cost of importing fuel even more expensive.
While the Competition Commission maintains there is a significant risk that some businesses may exploit the situation, these figures have not yet been verified by the Department of Mineral Resources and Energy (DMRE).
An official announcement is expected soon, ahead of the scheduled price change at midnight on Wednesday, 1 April.
How to Report Price Gouging
Makunga warned that failure to comply with pricing laws could result in legal action.
“Businesses that increase prices in advance of any actual fuel cost increases or increase prices by far more than their actual cost increases, risk being prosecuted and found guilty of price gouging.”
The Commission has urged consumers and businesses to report suspected cases.
“Given the heightened risk of price gouging during this period of oil price volatility, we call on the public and businesses to report instances where they believe price gouging is occurring so that the Commission can investigate.”
The public and businesses can lodge a complaint via email to ccsa@compcom.co.za or via WhatsApp at 084 743 0000.
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