Picture this: it is a Monday morning in Soweto. Thandi, a domestic worker wakes up at 5 am so she can
catch a taxi to Sandton, about 40 km away. She’s already budgeting for the rand with increased food costs
and clothes for their young children. The driver announces the fare has increased again. Begrudgingly, she
pays the fare as she knows that there is no cheaper or viable alternative. There is no nearby train station,
the bus routes are slow, and her neighbourhood is underserved. Therefore, the only option is just a taxi at
a price she cannot negotiate.

This is what a R3-R7 petrol increase looks like at street level: a trade-off between transport and food. Unlike the motorist filling up in Sandton, Thandi has no behavioural substitute, no electric vehicle to switch to, no work-from-home option to fall back on, nor a second income to absorb the shock. This situation illustrates the price inelasticity of demand. In practice, it means that when the cost of transport rises, low-income commuters pay regardless and are forced to cut spending somewhere else to compensate.

This is further compounded by the mode of transport available to Thandi as mentioned. With limited access to affordable alternatives, most lower income households are entirely dependent on petrol and diesel-reliant minibus taxis. As Figure 1 shows, the minibus taxi is predominantly the mode of choice among lower-income groups in Gauteng, while higher-income groups enjoy a broader range of options, including driving their own vehicles or using advanced rail such the Gautrain (which not all cities or towns have access to). For Thandi, there is no such menu of choices. It is the minibus taxi or nothing, at a price she cannot negotiate and cannot avoid and that will impact her standard of living. 

Figure 1: Transport mode usage by income group in Gauteng

Source: Authors adaptation and interpretation from the GCRO https://www.gcro.ac.za/outputs/map-of-the-month/detail/the-suffocating-cost-of-transport-in-the-gauteng-city-region/

To offset rising transport costs, low-income households are forced to cut spending somewhere, and in most instances, those cuts fall on food, education, or healthcare. These are not peripheral expenses. They are the same expenditure categories that determine long-run economic mobility. In this sense, a fuel price increase is not just a temporary inconvenience; it is a mechanism that actively deepens poverty and slows intergenerational economic progress. When viewed alongside South Africa's enduring legacy of spatial apartheid, which continues to place low-income communities far from economic opportunity and adequate public transport, the impact becomes impossible to ignore.

An already broken spatial and transport system

South Africa’s exposure to fuel price volatility needs to be understood through examining the country’s spatial economics, and how profoundly they were shaped by apartheid-era planning.

South Africa’s cities were deliberately designed to maximise the distance between low-income Black labour and the economic centres that employed them. Soweto is 25km from the Johannesburg CBD. Khayelitsha is 35km from Cape Town’s city centre. Mitchell’s Plain, Mamelodi and Umlazi are all detached either by distance or infrastructure (such as roads) from economic hubs. The geography of exclusion is persistently consistent across every major city in South Africa. Even in smaller emerging cities such as George, locations such as Pacaltsdorp and Thembalethu, are very much inaccessible to George’s city entre without a motor vehicle, due to road-linkage spatial planning and limited public transport. This is the legacy of a deliberate policy, enforced through the Group Areas Act and the Native Urban Areas Act, designed to keep labour accessible but communities marginalised.

The spatial logic persists in the economics of South African commuting today. Workers travel long distances from low-density, poorly serviced peripheries to high-density economic cores. This is a pattern that is structurally expensive to serve with public transport and structurally dependent on high-frequency, flexible modes like minibus taxis.

Rail transportation is the most cost-efficient mode of transport at scale, but requires density and long-term capital investment that the apartheid spatial model was explicitly designed to preclude. PRASA’s ongoing deterioration has compounded this. The Metrorail system that could, in theory, absorb hundreds of thousands of commuters from fossil-fuel dependent taxis has instead seen ridership collapse from a peak of approximately 650 million annual passenger trips in 2009 to a fraction of that today. Years of infrastructure neglect, cable theft, institutional dysfunction, and commuter competition with taxi organisations have all contributed to this decline. Commuters who moved off the rail and onto a taxi because the train stopped running are now directly exposed to global oil price volatility in a way they were not before.

There are, however, tentative signs of a course correction. In April 2026, Minister Barbara Creecy opened a draft Rail Masterplan for public input, and proposals have since emerged to rationalise the network by focusing investment on key high-demand corridors. The government has set an ambitious target of 600 million passenger trips annually by 2030. PRASA increased its passenger trips to 77 million in the 2024/25 financial year, nearly double the 39.4 million completed the year before, a meaningful recovery, but one that still leaves the system far short of the scale needed to meaningfully reduce low-income households’ dependence on the minibus taxi.

The minibus taxi industry in comparison is entrepreneurial, flexible, and in part unsubsidised, and it is the lifeblood of South African commuting, moving an estimated 10.7 million people every single day (Stats SA, National Household Travel Survey, 2020), accounting for roughly 75% of all daily public transport trips in the country (Fobosi, The Conversation, 2020). But this industry runs on extremely thin margins. Drivers take home what is left after fuel, vehicle repayments, insurance, and licensing are paid. Owners carry the financial risk of a depreciating asset with volatile returns. There is very little cushion. And critically, every single one of those vehicles runs on petrol or diesel (Wust, Bekker and Booysen, 2025). That means when a crisis like the Strait of Hormuz disruption rattles global oil markets, the shock does not stay in the headlines; it shows up at the taxi rank the very next morning. Fares go up. Driver margins shrink. And millions of low-income commuters, who have no alternative, simply absorb the hit.

The price does not stay at the pump

The most direct transmission beyond the commuter is through food, and the connection runs deeper than the fare increases already discussed. South Africa’s agricultural sector runs on diesel: tractors, irrigation pumps, cold-storage, and the road freight that moves produce from farm to shelf. For low-income households already spending upwards of 30% of their income on food, this second wave of fuel-driven price pressure compounds the first, the same shock that raised Thandi's taxi fare in the morning raises the price of her groceries in the evening.

This dual hit on transport and food simultaneously is what makes fuel price shocks uniquely regressive. A household in the bottom income quintile may spend 30–40% of their budget on food alone, compared to 5–10% for a household in the top quintile. When fuel-driven inflation pushes food prices up by even a few percentage points, the effective income loss as a share of total spending is several times larger for the poor than for the wealthy. The burden is not shared equally; it is concentrated precisely where there is the least capacity to absorb it.

Figure 2 : Food Cost as a % of total household expenditure by income group

Source: Authors adaptation from Statistics South Africa. (2025). Income and Expenditure Survey of Households 2022/2023. Statistical Release P0100. Pretoria: Stats SA. Table 8.2.52, p. 270.

The ripple effects extend further. SMEs face rising input costs across logistics, generator fuel (in the context of increased electricity prices and generation operating costs), and transport for staff and goods. For a business already operating on thin margins in an environment of unreliable electricity and water supply, another operating cost increase can be the difference between viability and closure. Each SME closure removes jobs, and those jobs are disproportionately held by lower-income workers, tightening the labour market for exactly the people least able to absorb the shock.

The structural fix: electrification as economic resilience

Fuel price volatility is not abstract or distant, it is measurable, immediate, and falling hardest on those least able to bear it. Government responds through levy reductions, transport subsidies, and targeted cash transfers as part of a broader social wage, and these interventions matter. But they are reactive, temporary, and fiscally costly. The 2022 fuel levy relief following Russia’s invasion of Ukraine alone cost the fiscus an estimated R6 billion over six months, and none of these tools change the structural reality that low-income South Africans live far from where they work, depend entirely on oil-powered transport to get there, and have no alternative when the price rises. If volatility driven by geopolitical instability, OPEC decisions, and global energy transition dynamics becomes a structural feature of the next few decades, reactive levy cuts will become increasingly unaffordable. The only durable answer is to reduce the economy’s dependence on imported fossil fuels for transport altogether, not just as a needed and desired climate aspiration, but as a macroeconomic and fiscal risk management imperative.

The economic case for electrifying South Africa’s public transport system is at its core an import substitution argument. Every litre of petrol consumed by a minibus taxi is a rand that leaves the South African economy. South Africa has no significant domestic oil production; it is a price-taker in a market controlled by forces entirely outside its influence. By contrast, South Africa has among the world’s best solar and wind resources, and a renewable energy sector that has demonstrated it can deliver electricity at competitive cost when the policy and regulatory environment allows it to. An electrified public transport network, electric buses, rehabilitated and expanded rail, and over time electrified taxis, would do three things simultaneously: reduce operating costs for transport operators making fare stability more achievable; insulate commuters from global oil price volatility; and redirect transport spending into the domestic energy economy rather than out of it through the balance of payments.

This is also, critically, a spatial equity argument. A well-designed electrification programme would prioritise the routes and communities most transport-dependent and most exposed to price volatility, townships, peri-urban areas, rural corridors. Done right, it is an opportunity to begin correcting the spatial injustice that makes these communities so vulnerable in the first place. Done badly, or captured by the same infrastructure inequality that has always characterised South African investment, it will simply electrify the suburbs while the township commuter keeps paying the petrol price.

What needs to happen, and who needs to do it

The transition will not happen on its own, and it will not happen fast enough without deliberate pressure on specific actors to help relieve the pressure South Africans face from the current fuel crisis.

National Treasury and the DTIC need to move public transport electrification from an aspirational policy into the capital expenditure pipeline, with procurement frameworks, financing vehicles, and timelines attached. The Integrated Resource Plan and the National Transport Master Plan need to be read together, not in separate departmental silos.

Development finance institutions. The IDC, DBSA and their international partners should prioritise key electrified public transport, even across difficult sectors such as minibus taxis. The risk-return profile of a subsidised electric bus fleet on a high-ridership township route compares favourably to many of the projects currently on their books, once the avoided social cost of continued fuel price exposure is properly priced in.

Private sector employers, particularly in sectors with significantly lower-income workforces (such as call centre agents), should be rethinking hybrid and flexible work arrangements where possible not only as productivity tools but as genuine cost-of-living interventions. The maths is simple: two fewer commuting days a week for an employee earning R6,000 a month, spending R60 a day on taxis, is R2,400 a year back to spend on necessities like nutritious food, school fees, and clothes.

None of this is sufficient on its own. But the alternative, a recurring cycle of price shocks, reactive subsidy relief, and structural vulnerability that resets exactly where it started, is both economically costly and, for millions of South Africans, genuinely harmful.

Thandi paid a higher fare from Soweto this morning. Can we build a system where she doesn’t have to keep absorbing shocks she had no hand in creating? A question to also ponder is whether there is actually a social and political will to cushion the impact of fuel shocks on an already unequal and strained society.

References

Business Day. (2026, April 23). Creecy opens draft rail masterplan for public input. Available at: https://www.businessday.co.za/news/2026-04-23-creecy-opens-draft-rail-masterplan-for-public-input/

Fobosi, S.C. (2020). South Africa's minibus taxi industry has been marginalised for too long. This must change. The Conversation. Available at: https://theconversation.com/south-africas-minibus-taxi-industry-has-been-marginalised-for-too-long-this-must-change-142060

Gauteng City-Region Observatory (GCRO). (n.d.). The suffocating cost of transport in the Gauteng City Region. Available at: https://www.gcro.ac.za/outputs/map-of-the-month/detail/the-suffocating-cost-of-transport-in-the-gauteng-city-region/

News24. (2026, May 3). SA’s rail rescue: Ditch 5,000km, focus on key routes. Available at: https://www.news24.com/business/economy/sas-rail-rescue-ditch-5-000km-focus-on-key-routes-20260503-1178

Passenger Rail Agency of South Africa (PRASA). (2025). Group Annual Report 2024/25. Pretoria: PRASA.

Statistics South Africa. (2021). National Household Travel Survey 2020. Statistical Release P7351. Pretoria: Stats SA.

Statistics South Africa. (2025). Income and Expenditure Survey of Households 2022/2023. Statistical Release P0100. Pretoria: Stats SA.

Wust, J., Bekker, J. and Booysen, M.J. (2025). Investigating scheduling of minibus taxis in South Africa’s eventual electric paratransit. Journal of Transport Geography, 123. Available at: https://www.sciencedirect.com/science/article/pii/S0966692324003028