Fuel price shock pushing South Africa's businesses closer to the brink

Motheo Khoaripe speaks to Dr Eric Levenstein, Head of Insolvency & Business Rescue at Werkmans Attorneys about how South Africa’s sharp fuel price increases are escalating operating costs, accelerating cash flow pressure and becoming a critical trigger for financial distress across key sectors.

Listen to the interview in the audio player below the article.

South Africa’s sharp fuel price increases are no longer just a concern for motorists, they're fast becoming a major threat to business survival.

Recent fuel hikes have been among the steepest in years, with petrol rising by more than R3 per litre and diesel by over R7 per litre. These increases are feeding directly into operating costs, affecting everything from production and distribution to day-to-day business activities.

For many companies, fuel is not an optional expense, but rather a core input cost. Industries such as agriculture, manufacturing, mining and logistics are especially exposed. As costs rise rapidly, businesses are finding it harder to maintain margins, leading to what experts describe as 'margin compression'.

Speaking to Motheo Khoaripe on The Money Show, Dr Eric Levenstein, head of insolvency & business rescue at Werkmans Attorneys, warns that rising fuel costs are placing severe pressure on company finances, particularly in sectors that rely heavily on transport and logistics.

He says higher fuel bills mean businesses need more working capital just to keep operations running. 

"This continued pressure, and this increase in inflation as we're looking forward into the next few months is really an inflection point, or rather a springboard into potential financial stress for those corporates who won't be able to cope with increased costs..."

- Dr Eric Levenstein, head of insolvency & business rescue - Werkmans Attorneys

"Nevermind the logistics sector, the freight firms pushing goods around the country. You've got local airlines who are going to see an increase in fuel prices. You're going to have potential stockpiling of fuel."

- Dr Eric Levenstein, head of insolvency & business rescue - Werkmans Attorneys

"Bulk purchases of fuel are going to become more and more expensive for freight and logistics companies, and that's just going to have a knock-on effect on the ability to trade."

- Dr Eric Levenstein, head of insolvency & business rescue - Werkmans Attorneys