Middle East conflict drives record fuel price hikes across Africa

The war in the Middle East is continuing to take its toll on African economies that are heavily reliant on imported petroleum products.

South Africa and Malawi declared the sharpest monthly adjustments of fuel prices in recent history due to the conflict, with consumers footing the bill.

South Africa's Department of Mineral and Petroleum Resources reported that, from Wednesday, gas prices rose by R3.06 (about $0.18) per liter while diesel increased by between R7.37 and R7.51.

"In exploring measures that can provide relief to consumers while ensuring economic stability, the ministry of finance has announced a temporary reduction of R3 per liter in the general fuel levy for both petrol and diesel effective from April 1 to May 5," said Lerato Ntsoko, the spokesperson of the agency.

Meanwhile, illuminating paraffin — a key energy source for low-income households — saw an even steeper rise of R11.67 per liter.

Malawi also implemented the largest increase of up to 35 percent for key petroleum products, effective from Wednesday.

The Malawi Energy Regulatory Authority Board Chairperson Lucas Kondowe noted that the conflict in Middle East continues to exert upward pressure on world prices of petroleum products.

"Traditionally, suppliers' prices are based on the previous months published average prices, but due to the volatile price environment, all suppliers are currently demanding and using averages for a fortnight in the current month," he said in a news statement.

The Malawian government raised gas and diesel prices to 6,672 kwacha ($3.86) per liter, making it one of the highest prices in Africa.

Energy regulators across the continent have also responded by adjusting pump prices and passing on the rising import costs to consumers.

Countries that have implemented significant hikes also include Tanzania, which has increased fuel prices by about 33 percent, while Ghana raised gas prices by around 15 percent and diesel by nearly 19 percent.

In Nigeria, Africa's most populous nation, Dangote Petroleum Refinery on March 21 announced a fresh increase in the price of Premium Motor Spirit from 1,175 Nigerian naira ($0.85) to 1,245 naira per liter, following the Middle East crisis, which has pushed crude oil prices above $100 per barrel.

Other countries that have announced fuel price increases include Mauritania, the Gambia, Mali, Botswana, Ethiopia and Zimbabwe.

Support measures

To cushion vulnerable households from the mounting effects of the Gulf conflict, several governments have introduced support measures, including tax adjustments and energy-saving policies, while Kenya reaffirmed that a fuel stabilization fund and government-to-government fuel deal continue to moderate price spikes and ensure a stable supply.

Meanwhile, the United Nations Trade and Development has raised alarm that the disruption of critical energy routes caused by the Middle East conflict has intensified economic pressure far beyond oil markets.

According to a rapid assessment by the UN body, activity through the Strait of Hormuz has fallen to a near standstill, with ship transits plummeting by about 95 percent.

"This has disrupted a large share of global energy supplies, driving fuel and transport costs higher and feeding inflationary pressures across economies worldwide," they said in their update.

According to International Energy Agency about 25 to 30 percent of global oil and 20 percent of liquefied natural gas normally passed through the narrow waterway.

victor@chinadailyafrica.com