October 13, 2026
By Dr Thomas Funke, CEO, SA Canegrowers
After the recent increases, diesel and petrol prices are in uncharted territory in South Africa. These increases will quickly find their way into the cost of moving people, producing food and transporting goods around the country.
The immediate cause is largely international. According to the Department of Mineral and Petroleum Resources, the average Brent crude oil price increased from US$87.89 to US$101 a barrel during the review period that led to the local pump prices increasing. The volatility in oil prices is driven in turn by the continuing conflict between the United States and Iran, uncertainty around the Strait of Hormuz, higher shipping costs and lower global oil inventories which have been depleted since the conflict started.
South Africa cannot control any of those factors. We can, however, decide how exposed our economy remains to them.
For years, South Africa has discussed developing a domestic biofuels industry. The original National Biofuels Industrial Strategy was approved by Cabinet as far back as 2007, with energy security and rural employment among its stated objectives. Regulations providing for the blending of biofuels into conventional fuels followed.
Nearly two decades later, the opportunity remains largely unrealised.
Sugarcane gives South Africa a practical way to begin changing that.
Bioethanol produced from sugarcane can be blended into petrol, replacing a portion of the fossil fuel that would otherwise have to be produced from or priced against imported crude and petroleum products. Nobody should suggest that ethanol will make South Africa immune to international oil shocks. But producing more of our transport energy domestically would gradually reduce our exposure while creating economic activity here at home.
Studies presented to Parliament have estimated that South Africa could produce as much as 750 million litres of ethanol from sugar feedstocks annually while continuing to meet domestic sugar demand, showing huge potential. At current petrol consumption levels, that could support an ethanol blend of around 8%. The same work estimates that development at this scale could create approximately 21,000 jobs through expansion of the cane-growing industry.
However, realising that opportunity requires infrastructure and investment with political support.
South Africa needs investment in bioethanol production facilities, the conversion and expansion of existing sugar-milling capacity, storage and transport infrastructure, and the facilities required to blend ethanol reliably into the national fuel supply. Investors also need a predictable regulatory and pricing framework and sufficient certainty that locally produced ethanol will have a market.
This is precisely the kind of industrial investment that the second phase of the Sugarcane Value Chain Master Plan should unlock.
When Phase Two was signed in April, government identified the transition from a primarily sugar-producing industry towards a broader sugarcane-based industry as one of its central priorities. Diversification is supposed to be at the heart of that transition. The original Master Plan specifically identified fuel bioethanol, bio-jet fuel, electricity, biogas and other products as opportunities for developing new sugarcane value chains.
There are encouraging signs that private capital is ready to participate. Earlier this year, a US$1 billion investment commitment was announced for a large-scale South African bioethanol facility using sugarcane and maize as feedstocks. That should be viewed as the beginning of a new industry rather than an isolated project.
For sugarcane growers, diversification is increasingly urgent. The industry supports more than one million livelihoods and includes around 27,000 small-scale growers, yet growers have faced enormous pressure from rising input costs, a flood of foreign sugar and volatile global markets. The fact that the sugar tax is still in play and a constant threat to rural jobs leave growers on the brink of financial disaster.
A domestic bioethanol market would give sugarcane another route to market, creating additional demand for the crop and supporting investment in rural areas where alternative economic opportunities are often limited.
There is also a wider economic argument in that every litre of fuel that South Africa can sustainably produce from a domestic agricultural feedstock represents more of the transport-fuel value chain taking place inside our own economy: cane grown on South African farms, processed in South African facilities and supporting South African jobs.
The latest petrol increase will hurt households and businesses immediately. Biofuels cannot reverse that increase overnight, or even in the near term. But building a domestic biofuels industry is necessarily a longer-term project to mitigate for future price shocks that are outside of South Africa’s control.
That is exactly why the infrastructure has to be built now.
The next international oil disruption will not wait for South Africa to finish another strategy. The Sugarcane Value Chain Master Plan has already identified the opportunity, and we have the agricultural base, private-sector interest and proven international technologies.
What is required now is implementation at the same level of urgency that tomorrow’s fuel price increase demands.