Iran Attacks: Rising Oil Prices Hit African Economies

Rising global oil prices, spurred by recent geopolitical tensions in the Middle East, are placing significant strain on African economies, with South Africa’s National Treasury acknowledging limited capacity to shield consumers from escalating fuel costs.

Crude oil prices have surged more than 40% in recent weeks, exceeding $100 a barrel, disrupting shipping and production across the African continent. Duncan Pieterse, Director-General of South Africa’s National Treasury, stated at a Stanlib Asset Management conference in Johannesburg that providing relief on petrol and diesel prices would require tens of millions of rand, a sum currently unavailable within the country’s fiscal buffers. Bloomberg reported his comments.

“Without those resources in our fiscal buffers, any relief would be minimal or non-existent,” Pieterse said.

South Africa previously implemented a temporary reduction of 1.50 rand per litre on its general fuel levy in 2022 following Russia’s invasion of Ukraine. Any similar intervention now would be constrained by budgetary limitations and would likely be small, temporary, and funded within existing allocations. The Treasury collected approximately 97 billion rand from fuel levies in the 2025–26 fiscal year.

The economic pressure comes as South Africa continues to recover from a period of sluggish growth, registering a rate of 1.1% last year – its highest since 2022. For a decade prior, the country averaged less than 1% annual growth, hampered by electricity shortages and logistical bottlenecks that negatively impacted mining and manufacturing output, and discouraged investment.

Beyond South Africa, other African nations are also grappling with the effects of rising fuel costs. Ethiopia has urged its citizens to reduce fuel consumption in response to supply disruptions originating in the Middle East. Nigeria, benefiting from the recently operational Dangote Refinery, has nonetheless increased fuel prices three times in recent months, adding to household financial burdens.

Analysts caution that developing nations may face increasing difficulties in securing fuel supplies as wealthier countries are able to outbid them in the global market.