By Dr Ernst van Biljon, head lecturer, Supply Chain Management, IMM Graduate School
The current volatility in petrol and diesel prices in South Africa cannot be understood in isolation – it is a direct consequence of the escalating war in Iran and the associated disruption of global energy supply routes.
Supplied by IMM Graduate School
The instability around the Strait of Hormuz, a critical artery for global oil flows, has pushed crude prices sharply higher and introduced real uncertainty into fuel availability. This is not simply another cyclical fuel price adjustment. It is a geopolitical shock to the global energy system, with oil prices having risen dramatically since the onset of the conflict, compounded further by currency volatility in emerging markets such as South Africa. In practical terms, South Africans are feeling this impact twice – through higher international oil prices and a weaker rand amplifying those increases at the pump.
What makes this disruption particularly significant is that it is not only a pricing issue – it is an operational one. South Africa’s logistics system is deeply dependent on diesel-powered road freight, and when fuel costs spike rapidly, the impact is not linear. It forces immediate behavioural changes across the supply chain. Transporters begin to prioritise higher-margin routes, reduce trip frequency or delay dispatches. Load consolidation increases, but at the expense of speed. In effect, the system starts trading off service levels for cost containment in real time.
This has a cascading effect across industries. Retailers may not only face higher input costs, but also less predictable delivery schedules. Manufacturers may need to adjust production planning as inbound materials arrive inconsistently. For perishable goods, even small delays can translate into waste or stock losses. What emerges is not just inflationary pressure, but increased variability – and variability is one of the most destabilising forces in any supply chain.
Another underappreciated impact is the introduction of fuel-related surcharges and dynamic pricing in transport contracts. While necessary for operators to remain viable, these mechanisms shift risk downstream to clients, creating tension in supplier relationships and complicating cost forecasting. Smaller logistics providers, in particular, may struggle to absorb volatility, potentially leading to capacity constraints if margins become unsustainable.
From a policy perspective, short-term interventions such as temporary fuel levy relief may help to cushion the immediate shock. However, the deeper issue is structural. South Africa’s heavy reliance on road-based freight, combined with limited modal alternatives and existing infrastructure constraints, leaves the system highly exposed to global fuel disruptions. Consequently, events such as the Iran conflict highlight the urgency of diversifying transport modes, improving rail reliability and strengthening co-ordination across fuel distribution networks.
This also brings into sharper focus the role of energy diversification within supply chains. While the transition to alternative fuels and electrified transport has largely been framed as a sustainability imperative, the current crisis highlights it as a resilience strategy. Reducing dependence on diesel – whether through rail revitalisation, electrified fleets or alternative fuel adoption – can act as a structural hedge against geopolitical disruption. For South African supply chains, the question is no longer only about cost efficiency, but about exposure to systemic risk.
While fuel markets may stabilise if geopolitical tensions ease, the lesson for supply chain management is that shocks of this nature do not only increase costs – they alter system behaviour. The organisations that navigate this best will be those that can adapt quickly, rebalance service and cost trade-offs, and build greater flexibility into their logistics networks.