Rising oil prices reveal cracks in South Africa’s diesel-driven economy

Motheo Khoaripe speaks to Dr Ernst van Biljon, head lecturer in Supply Chain Management at the IMM Graduate School, about how the escalating tensions around the Strait of Hormuz are exposing deeper structural weaknesses in South Africa’s logistics system, where a heavy reliance on diesel-powered road freight is amplifying both cost pressures and operational disruptions across the supply chain.

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

South Africans are once again feeling the pinch at the fuel pump, but this time the story goes far beyond a routine price increase.

However, the real concern lies beyond fuel prices. South Africa’s economy is heavily reliant on diesel-powered road transport to move goods across the country.

When diesel prices spike suddenly, the logistics sector cannot absorb the increase smoothly. Instead, companies are forced to adapt quickly, often in ways that disrupt normal operations.

The bigger issue is that South Africa’s transport system depends too much on road freight, with limited alternatives like rail. This makes the country vulnerable when global fuel prices rise.

The knock-on effects are felt across multiple industries. Retailers face not only higher costs but also uncertainty around stock availability. For sectors dealing with perishable goods, even minor delays can result in spoilage and financial losses.

In the long run, businesses and government may need to look at other options, such as improving rail transport or using alternative energy. This could help reduce reliance on diesel and make the system more stable.

Speaking to Motheo Khoaripe on The Money Show, Dr Ernst van Biljon, head lecturer in Supply Chain Management at the IMM Graduate School says even if fuel prices settle down, this situation shows how global events can quickly affect everyday business in South Africa.

"....Because most of what moves in South Africa, moves by road, it is not only the increase in diesel, it is also potentially also the problem with the weaker rand."

-  Dr Ernst van Biljon, head lecturer in Supply Chain Management - IMM Graduate School 

"It impacts on demand planning. So that uncertainty means everyone in supply chain now keeps larger levels of stock and inventory. And that in itself means higher costs for all of those players, and they simply pass that on down the chain."

-  Dr Ernst van Biljon, head lecturer in Supply Chain Management - IMM Graduate School 

"This impacts on smaller providers. Either smaller logistics providers, suppliers. So it has a huge impact on the economy ultimately, and we cannot really see more suppliers and developing suppliers, and emerging suppliers being put under this pressure at this time in our economy."

-  Dr Ernst van Biljon, head lecturer in Supply Chain Management - IMM Graduate School