Motorists and transport operators in Mbombela and surrounding areas were left reeling when diesel prices at several filling stations jumped significantly this week.

In a startling move, several local stations have hiked the price of 50ppm diesel from the average R22 range to as high as R33 per litre, citing supply volatility linked to the escalating conflict in the Middle East.

In Mbombela this is how much pay for diesel per litre:

Astron Energy in Mbombela: CBD R33.36 per litre
Astron Energy Riverside: R33.00
Engen Riverside: R22.72
Engen Elmadr: R22.15
Engen Courtside: R22.14
BP in Riverside: R22.22
Shell Mbombela: CBD R21.19
TVM Petroleum R27
Total Energies: R30.25
Sasol: R23.08.

While petrol prices remain strictly regulated by the government, the sudden skyrocketing of diesel has exposed a critical gap in South Africa’s fuel pricing policy.

The spokesperson for Department of Mineral and Petroleum Resources (DMPR), Lerato Ntsoko, has clarified that while they set a wholesale list price for diesel, they do not regulate the retail price.

ALSO READ: SA fuel shortage fears dismissed: Department urges no panic buying

Unlike petrol, which must be sold at the same price at every station within a specific geographic zone, diesel is an open-market product at the pump.

“Only the wholesale price retailers are legally allowed to add their own markups to cover operational costs or, in current cases, to hedge against international market shocks” she said

The primary driver behind this volatility is the heightened tension in the Middle East, which has seen Brent Crude oil prices surging.

Traders are currently pricing in risk premiums due to potential disruptions in the Strait of Hormuz, vital global choke point for oil tankers.

Fuel station owners in Mpumalanga claim that their national offices and suppliers have instructed them to adjust prices immediately to reflect the replacement cost of new stock, which is becoming increasingly expensive to import.

According to a Mbombela-based private fuel supplier, Ehrus Lubbe from JEV Petroleum, one of the main factors in the diesel price increase is the international market. Prices in South Africa are based on the Basic Fuel Price, a formula used by the Department of Mineral Resources and Energy (DMRE) that reflects the international cost of importing diesel – this includes global spot prices, shipping and the rand/dollar exchange rate.

“While petrol prices are government-regulated, diesel retail prices are not. The DMRE only sets a guideline wholesale price, and fuel retailers are free to adjust their diesel prices according to their own supply costs and business conditions. During supply shortages, suppliers raise their prices and retailers may need to increase pump prices to secure stock and remain operational,” said Lubbe.

He added that nearly all of SA’s fuel imports of both crude oil and refined product are transported by sea.

“Around 95% of the country’s total import/export volume moves by sea. Roughly 70% of SA’s crude oil requirements arrive entirely by maritime transport,” he said

Amid recent panic buying, Lubbe said the country will not run out of fuel, but with the war in the Middle East, the price will continue to increase.

Due to the current situation, several fuels station have set limits of 200 litres per transaction.

“We have noticed that some of the filling stations are currently out of stock in Mbombela. But we still have enough stock to keep us going, and we believe that ships will also bring fuel into the country,” he said.

Some of the franchise filling station Mbombela told Lowvelder that they were instructed to increase their price to avoid operating at a loss as they are buying in bulk at a higher price.