South Africa: Diesel Fuel Pricing Mechanism Is Finally Earmarked for an Overhaul

An unexpected result of the attacks on Iran is that the long-awaited discussion about how fuel is priced in South Africa has begun.

"Daar's niks diesel in die Overberg nie (There's no diesel in the Overberg)," was the diagnosis delivered by a Caledon resident who had to drive to Hermanus to discover the extent of the fuel crisis. When news of possible supply constraints reached the Western Cape's bread basket, wheat farmers prepping for planting season made haste to the nearest filling stations.

The government was quick to reassure citizens that there were no fuel shortages, but it is difficult to preach calm to an industry that has been bleeding from multiple mortal wounds. Is it still panic buying when livelihoods are at stake?

OVK, a cornerstone supplier in South Africa's expansive agricultural belt (operating across the Free State, Eastern Cape and Northern Cape, all the way to North West), responded quickly by suspending all diesel orders on 9 March.

A week later came the notice: "Due to external factors that have led to an increase in the demand for fuel, OVK is unable to obtain sufficient fuel to serve our customers and community in the normal course of business. OVK has absorbed a substantial portion of the price increases which have occurred to date, but due to further fuel price increases, it...

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