As oil prices rise, South Africa intervenes while Nigeria holds back

South Africa has announced temporary fuel relief measures to cushion households and businesses from sharp price increases triggered by global oil market disruptions, becoming one of the latest countries to intervene as energy costs surge.

The move stands in sharp contrast to Nigeria, where authorities have offered no comparable relief despite rising fuel costs, a gap that has drawn criticism in recent days.

South Africa’s Minister of Finance, Enoch Godongwana, and Minister of Mineral and Petroleum Resources, Gwede Mantashe, announced a temporary reduction in the general fuel levy by about R3 (N245) per litre.

Under the measure, the levy on petrol will drop from R4.10 to R1.10 per litre, and diesel from R3.93 to R0.93, effective from April 1 to May 5. The government said the intervention, estimated to cost about R6 billion in foregone revenue, is designed to be fiscally neutral and will be reviewed monthly.

The relief comes as fuel prices surge globally following heightened tensions linked to the Iran conflict, which has disrupted supply through the Strait of Hormuz and pushed Brent crude prices from about $69 to nearly $94 per barrel.

Despite the intervention, South Africans will still face steep increases. Petrol prices are set to rise by R3.06 per litre, while diesel will jump by more than R7 per litre. Illuminating paraffin, widely used by low-income households, will increase by R11.67 per litre.

Officials said the levy cut aims to soften the immediate shock, even as broader support measures are being developed for households and key sectors of the economy.

“Consultations have been held… to provide short-term relief to consumers, while maintaining a stable and sustainable fuel supply system,” the ministers said in a joint statement.

Labour groups and industry officials welcomed the move but warned it may not be sufficient. The Congress of South African Trade Unions said workers already struggling with high living costs may still be unable to absorb the increases, particularly for diesel and paraffin, which are critical for transport and household energy.

Similarly, the Motor Industry Staff Association said the levy reduction would help ease pressure on households facing rising fuel and electricity costs.

Authorities also moved to calm fears of fuel shortages, attributing isolated supply disruptions to panic buying and distribution bottlenecks rather than a lack of national stock.

The intervention places South Africa alongside several countries that have introduced subsidies, tax cuts, or price caps to shield citizens from global energy shocks.

In Nigeria, however, similar relief measures have been largely absent, despite rising fuel costs and inflationary pressures on households. Analysts say the lack of intervention risks worsening the cost-of-living crisis, particularly as transport and food prices continue to climb.