Tips for SMEs to prepare for rising petrol prices amid Middle East conflict

2026-03-16 - 15:23

South Africans have been warned about a sharp increase in petrol prices expected in April due to the Middle East conflict. Garth Rossiter, chief risk officer at Lula, says the increase is set to hurt vulnerable households and small businesses most. This is because most small and medium enterprises (SMEs) lack the pricing power of larger corporations. “When fuel prices rise, large companies may be able to absorb the cost or renegotiate contracts. Small businesses often do not have that flexibility. They pay the price at the pump immediately, but they cannot always increase their prices overnight. That means their margins compress.” ALSO READ: Fuel price shock: Here’s how much more petrol might cost you in April SMEs to feel the impact Recent volatility in global oil markets and a weaker rand have raised expectations that local fuel prices could increase significantly. Rossiter notes that diesel costs are particularly important for the agricultural as well as broader business sector, as trucks and commercial fleets rely heavily on it to move goods across the country. If diesel prices spike, transport costs could increase sharply, creating immediate operational pressure for many SMEs. SMEs to experience temporary cash-flow gap He emphasises that many SMEs in South Africa are expected to experience a temporary cash-flow gap. While operating costs increase immediately, revenue adjustments take longer to filter through. According to Rossiter, this mismatch is one of the key reasons small businesses can struggle during periods of economic volatility. “Liquidity is what often determines whether a small business weathers a shock or not,” he adds. “Businesses are effectively funding their customers in the short term while costs rise ahead of income. Without proper planning, that gap can put real pressure on cash flow.” Preparation is important Rossiter stresses that while global events may be unpredictable, preparation is still within a business owner’s control. “The most resilient businesses are the ones that plan and understand how external shocks might affect them,” he says. “Even if you do not operate trucks or transport goods yourself, your suppliers do. That means higher fuel prices will eventually reach your business in one way or another.” He advises SMEs to focus on proactive financial planning. This includes forecasting potential increases in input costs, understanding how supplier prices might change, and ensuring access to flexible liquidity if needed. ALSO READ: Middle East at war: Why South African waters will see more ships than usual Long-term financial commitments Rossiter says business owners don’t have a crystal ball, but they can prepare for different scenarios. “Planning for the possibility of higher costs allows businesses to protect their margins and make measured decisions rather than reacting under pressure.” Most importantly, he cautions businesses about making long-term financial commitments in response to what may ultimately be a short-term disruption. “In uncertain environments, flexibility matters,” he says. “The goal is to ensure you have options available if conditions tighten, while avoiding decisions that could lock the business into unnecessary long-term obligations.” However, Charmaine Mhlongo, Metropolitan’s head of brand marketing, believes long-term focus is critical. “Creating sustainable businesses is about empowering young entrepreneurs with the skills and knowledge that will give them longevity in the market,” she says. “A successful business starts with a strong foundation.” Budget for the business you want to build Thobani Zungu, an entrepreneur from Metropolitan’s 2026 Collective Shapers, says many business owners make the mistake of operating reactively, focusing on day-to-day survival, raising the importance of structured financial planning. “I’ve learned the importance of building systems, not just working hard. Sustainable growth comes from structure, planning, and clarity, not just effort,” said Zungu. “For many young entrepreneurs, their business is their family’s primary source of income. Yet risk is often overlooked. Insurance, including life, critical illness and business asset cover, can protect both the entrepreneur and the enterprise against unexpected disruptions.” Understand debt, don’t fear it Zungu says many people fear debt, which leads them to not understand how it can help them grow their businesses. “In a capital-constrained economy, good debt is often necessary for growth. Financing assets such as vehicles or equipment can help unlock further funding opportunities. “However, entrepreneurs must understand their debt position clearly before taking on additional commitments. Free budgeting tools and debt calculators can help business owners assess affordability and risk.” NOW READ: SA could be a big loser in Middle East conflict: Oil surges, stronger dollar hits rand