The ANC’s response to the fuel price shock

A rise in the price of fuel reaches far beyond the filling station. It affects the cost of getting to work, transporting food, running a small business and moving goods across the country. For households already under financial pressure, an international oil shock can quickly become a crisis in the monthly budget.

The African National Congress, which leads the Government of National Unity, must respond to these pressures with the seriousness they demand. The conflict involving Iran and the United States, and the wider tensions in the Middle East, threaten international shipping routes and global energy markets. South Africa’s dependence on imported crude oil and refined petroleum products leaves our economy exposed.

This is the context in which the R10 billion intervention for the Equalisation Fund must be understood. The Second Special Appropriation (2025/26 Financial Year) Bill provides for an allocation through the Department of Mineral and Petroleum Resources to the fund administered by the Central Energy Fund. Its purpose is to create a buffer against sharp increases in fuel costs.

The distinction between the funding decision and the parliamentary process matters. The Parliamentary Budget Office records that the Minister of Finance authorised the R10 billion withdrawal on 31 March 2026. The special appropriation provides for that expenditure through Parliament. On 8 October, the Standing Committee on Appropriations adopted its report on the Bill for consideration by the National Assembly.

The ANC’s support for this intervention is justified by the pressure that fuel costs place on households and economic activity. Strengthening the Equalisation Fund can help absorb part of an external price shock, rather than allowing the entire increase to reach consumers immediately. It offers temporary protection while the country responds to unstable international conditions.

The Strait of Hormuz is central to this vulnerability. Disruption along this shipping route affects the movement of petroleum products and the costs of supplying international markets. The Department of Mineral and Petroleum Resources identified uncertainty around the strait, international product prices and shipping costs among the factors behind the October fuel adjustment.

Fuel is an input into almost every sector of the economy, directly or through transport and distribution. Food moves from farms to processing facilities, warehouses, wholesalers and shops. Manufactured goods move through factories, ports and distribution centres. Higher transport costs can work their way into the prices consumers ultimately pay.

The effect is particularly serious in the logistics industry. When diesel becomes more expensive, the cost of operating trucks and other commercial vehicles increases. Transport operators face pressure to raise freight charges, while firms relying on those services must decide how much of the increase they can absorb and how much they will pass on.

Limiting sudden fuel increases can therefore support more than private motorists. It can give businesses greater certainty about their operating costs and ease pressure on the distribution of essential goods. For an economy that needs investment, production and employment, that predictability has value.

The benefit must reach the people the intervention is intended to protect. Public expenditure requires proper controls, transparent reporting and parliamentary oversight. The committee has called for detailed expenditure reports. That accountability is necessary to establish how the money is used and whether it delivers meaningful relief.

A temporary buffer cannot remove South Africa’s exposure to international oil prices or substitute for a longer-term approach to energy security. It can, however, reduce the immediate burden while government addresses those structural challenges. Relief today and greater resilience over time must form part of the same economic response.

Bolstering the Equalisation Fund is a reasonable use of the fiscal tools available to government in the present circumstances. The ANC’s responsibility in leading the GNU is to ensure that the response protects households, sustains economic activity and makes public resources count where the pressure is greatest.