When Brent crude oil spikes, petrol prices follow within weeks. That means higher transport, food and retail costs.
The Middle East conflict is happening far from South Africa, but households are soon to feel the impact, from the petrol pump to grocery bills.
Even if the war happens far away from the country, global events like these still affect South Africans, particularly through fuel prices, inflation and the value of the rand.
In practical terms, when oil prices rise internationally, it increases the cost of petrol and transport. This can push up the price of everyday goods as businesses face higher costs to move products across the country, with food prices often following soon after.
Starts with the price of oil
Zandile Makhoba, economist and lead research & insights at Liberty, said it all starts with the increase of the Brent crude oil price. The country imports all of its oil. It then pays in dollars, but uses the rand.
“When conflict happens in regions linked to global energy supply, oil prices often rise because of uncertainty around supply,” said Makhoba. “South Africa imports most of its fuel, which means higher global oil prices can eventually translate into higher petrol prices locally.”
Higher fuel costs not only affect motorists, but they also influence the cost of transporting goods across the country, which can filter through to everyday expenses such as groceries and household items.
Pressure households’ finances
Makhoba added that the higher oil prices place pressure on South Africa’s terms of trade, which refers to the relationship between export prices and the cost of imports like oil.
“When the cost of imports rises faster than the value of exports, it can weaken the rand.”
A weaker rand can make imported goods more expensive and may push inflation higher.
She said that the South African Reserve Bank (Sarb) may delay expected interest rate cuts while it assesses the inflation impact of the conflict. “Interest rate cuts may be postponed while policymakers assess the inflationary impact of the conflict, but the threshold for interest rate hikes remains very high.”
Practical steps to stay financially stable
Carlo Gil, wealth adviser at Liberty, said households can take practical steps to stay financially stable if the cost of living rises.
“Periods of global uncertainty can place pressure on household budgets, especially if fuel and food prices rise,” said Gil. “South Africans should focus on staying financially organised and disciplined.”
He suggests the following steps:
Review your monthly budget
Look closely at where your money is going and identify areas where you can reduce or reprioritise spending. Understanding your cash flow can help you make more intentional choices about what matters most to your lifestyle.
Cut back on non-essential spending
Small lifestyle adjustments can help free up money for essentials like fuel and groceries.
Build or maintain an emergency fund
Having savings set aside can help cushion unexpected financial shocks. A solid cash reserve provides stability and can prevent the need to access long-term investments prematurely.
Avoid taking on unnecessary debt
Higher inflation can make borrowing more expensive, so it is wise to be cautious about new credit.
Stay invested and avoid knee-jerk decisions
Market volatility can create opportunities, and exiting investments at the wrong time can lock in losses.
Review your investment strategy
Ensure your portfolio remains aligned with your risk profile, time horizon and evolving market conditions.
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