Navigating oil volatility: how SA corporates can harness banking tools amid fuel market instability

Navigating oil volatility: how SA corporates can harness banking tools amid fuel market instability

Kevin Ssemwogerere, Business Development Strategy Head, Treasury and Trade Solutions at RMB

The pending conflict and short-term ceasefire in the Middle East, has materially disrupted global oil markets, causing volatility in the price of Brent crude and the disturbance of shipping through the Strait of Hormuz, which carries roughly one-fifth of global oil supply.

Much like it has globally, in South Africa, the impact is being felt quickly across the fuel value chain.

From 1 April, petrol prices rose by R3.06 a litre to R23.25 despite a government-mandated R3 cut in the general fuel levy, while inland diesel jumped as much as R7.51 to R26.11 – the largest monthly increase in nearly two decades. This intervention, estimated to cost the fiscus about R6bn, provides short‑term relief but does not alter underlying exposure to global price movements. The deliberations to cease the conflict are reflecting a rebound to market stability and more palatable prices of oil but various sources of analysis on the conflict point towards a longer-term adverse impact on fuel prices and the cost of affected consumer goods.  

Across sub-Saharan Africa, where many economies hold fuel stocks for just 15-25 days against the International Energy Agency’s 90-day benchmark, the shock is reinforcing inflationary pressures, straining transport‑dependent supply chains and weighing on growth prospects.

These are not isolated price spikes.

They reflect a combination of near‑term geopolitical triggers and longer‑term structural fragilities. Geopolitical risk now features more prominently as a recurring consideration in corporate treasury strategic decision‑making, layering volatility on already stretched currencies and logistics networks.

For consumers, the pain is felt at the pump and in the supermarket: higher diesel costs feed directly into food prices, taxi fares and delivery charges. For businesses, the implications run far wider. Fuel is the lifeblood of mining, agriculture, manufacturing and retail distribution. In stressed scenarios, sharp increases in fuel prices can materially compress margins for industries that are highly dependent on fuel as an input for production.

Corporates operating across multiple African markets face a compounding problem.

Oil-price volatility collides with currency movements – including recently observed rand depreciation against the dollar – while day-to-day operations demand constant recalibration of procurement, pricing and cash-flow forecasts.

Importers of refined products may need to secure additional credit headroom as suppliers tighten terms amid uncertainty. Fuel retailers and wholesalers, already navigating thinner margins after regulatory changes that have turned South Africa into a net importer of petroleum, often respond by increasing order volumes to manage supply risk. This, in turn, can increase working‑capital requirements.

Pricing decisions become more complex when both input costs and exchange rates fluctuate simultaneously. Liquidity planning can shift from optimisation to risk mitigation. In practical terms, the financial supply chain becomes increasingly exposed alongside the physical one.

Yet this environment also highlights where forward-looking companies can strengthen resilience.

Banks are well positioned to support corporates through these conditions. Risk‑management tools such as forwards, options and collars across commodities and currencies enable treasurers to reduce earnings volatility and improve planning certainty, while supporting more efficient capital deployment. 

Trade-finance solutions across the spectrum can support procurement continuity when purchasing costs rise, supplier terms tighten, and working capital acceleration is required. These solutions are also a viable avenue for risk mitigation when entering new procurement relationships. Cross-border payments and collections platforms, increasingly digitised, help reduce settlement risk and speed up cash conversion cycles particularly in markets where delays remain a material operational concern. 

The most effective partnerships go beyond the application of products by empowering decision making through insights. 

Local banking relationships offer on‑the‑ground understanding of regulatory developments, operational and counterparty dynamics, complementing global market intelligence. In the fuel value chain, where oil majors supply franchise dealers, traditional ordering processes often tie up the liquidity of emerging dealers while exposing suppliers to collection risk. The inventory–payment relationship continues to present opportunities for improvement.

Technology is accelerating the shift in risk and treasury management.

Modern treasury‑management systems provide near‑real‑time visibility, enabling faster scenario analysis and more informed risk assessment.

The latest treasury management platforms increasingly integrate visibility on cash positions, foreign‑exchange exposures and commodity hedges, reducing reporting lag and enhancing decision‑making agility. In markets that can shift rapidly on geopolitical or macroeconomic developments, this capability supports proactive rather than reactive treasury management.

The opportunity extends beyond defensive commercial practices.

Companies that treat financial risk management as a core competency – rather than a back-office function – can convert volatility into competitive advantage. Fuel retailers adopting digital inventory management and payment solutions are better positioned to respond to shifts in demand. Fleet operators can leverage dynamic fleet fuel payment solutions to actively manage fuel costs across their distribution networks. Banking partners that enable working capital relief through solutions that align to the businesses’ sales and working capital cycle can assist companies to manage shifting market dynamics.

A change in mindset is required: Corporates need to view the banking ecosystem as a deeper strategic enabler for their operations. In a world where geopolitical shocks are no longer black swan but recurring events, the corporates that thrive will be those that embed resilience into their operating models today. Strong banking partnerships that leverage innovative bank capabilities such as hedging and liquidity tools, and technology-enabled treasury functions are not optional extras. They are the infrastructure of survival – and, for the most agile players, the foundation of outperformance.

The message is clear. As the fuel-price shock of April 2026 ripples through African economies, the winners will not be those who merely absorb the blow.

They will be the companies that leverage sophisticated banking solutions to turn uncertainty into predictability, and volatility into value. In the new normal of ever-changing fundamentals, financial agility is the ultimate competitive advantage.

ENDS