Running on fumes

30 March 2026 — Fuel rationing has started at some petrol stations — and farmers have two weeks of diesel or less. The Reserve Bank has scrapped rate cuts. In the worst-case inflation scenario, several hikes are coming. The auditor-general has flagged problems in 89% of government infrastructure projects — yet the president wants to ramp up spending. Washington has launched a trade investigation that could result in tariffs on SA’s mining and agricultural exports. A cyberattack just exposed the AI tools your business may already be using.

Running on fumes

A recent survey by the Fuel Industry Association, conducted in collaboration with Agbiz and AgriSA, reveals acute fuel stock pressures. About 93% of fuel station owners and operators reported having two weeks or less of petrol and diesel in stock.

While stations typically aim to hold 7 to 14 days as a normal buffer, the fact that nearly all are at this level, with more than half already rationing supply to customers by imposing daily limits from 50 to 500 litres, and some facing intermittent supply or stockouts, indicates unusually strained conditions at the retail level.

Among farmers, 58% had two weeks or less of diesel, with over a third holding one week’s supply or less. Only 4% had more than 60 days’ worth, well below typical reserves for the sector during the pre-harvest months.

The government and the Fuel Industry Association maintain that national fuel supplies are adequate and have urged consumers not to panic buy. Last week, the minister of mineral and petroleum resources, Gwede Mantashe, said that supplies were secured until the end of April.

However, should significant shortages materialise despite these assurances, the effects on agriculture and transport logistics would be profound. Diesel powers harvesting equipment, irrigation systems and cold chain operations; disruptions would hinder production, drive up food prices and add to headline inflation.

SARB holds rates steady

At its meeting on 26 March, the Monetary Policy Committee of the South African Reserve Bank (SARB) voted unanimously to keep the repo rate steady at 6.75%. Rate cuts that had been anticipated earlier in the year are now off the table. The bank expects headline inflation to accelerate to around 4% in the near term, driven largely by fuel inflation exceeding 18% in the second quarter.

Governor Lesetja Kganyago outlined two scenarios linked to the Iran conflict. In the first, the war lasts about two months, with oil averaging near $100 a barrel and the rand about 5% weaker; this would push inflation above 4% and likely require one interest rate hike in 2026.

In the second, more severe scenario, the conflict drags on for over a year, with oil staying above $100 and the rand 10% weaker, pushing inflation above 5% and requiring several rate hikes. In neither scenario does the SARB expect rate cuts this year.

Should the more adverse scenario materialise, we flag the risk of elevated protest action and civil unrest. Sharply higher fuel prices will raise the cost of living, depress economic activity, and increase transport expenses. According to Statistics South Africa’s National Household Travel Survey 2020, 80.2% of workers who use public transport rely on minibus taxis, making them particularly vulnerable to fare increases.

Money badly spent

The Auditor-General’s latest report on national and provincial government audit outcomes for 2024/25 paints a worrying picture of public spending efficiency.

Of 152 infrastructure projects audited, covering schools, hospitals, roads and water systems worth R47.4 billion, 136 — or 89% — had adverse findings. Some 72% of the projects were delayed by an average of 41 months, 47% experienced cost overruns, 39% showed poor-quality work, and 10% were either unused or left idle after completion.

Only 36% of government auditees received clean audits, managing just 12% of the total expenditure budget. Among state-owned enterprises the picture was worse, with only 2 of 19 receiving clean audits. Eskom, which is implementing an 8.76% electricity tariff increase from April, again received a qualified opinion.

Government expenditure accounts for roughly a third of South Africa’s GDP. Much of this spending remains inefficient and wasteful, and it is largely unresponsive to market signals, as seen in Eskom’s rising tariffs despite falling demand in some areas.

Prices for essential services such as electricity, water and transport are administered by the government and frequently outpace general inflation. This limits the SARB’s ability to combat inflation effectively through interest rate adjustments. Tighter monetary policy raises borrowing costs without addressing the structural cost pressures originating from the public sector.

Pretoria in Washington’s crosshairs, again

A United States (US) trade investigation could result in higher tariffs on South African products, applied broadly or sector-specifically as a retaliatory action under Section 301 of the Trade Act of 1974. Other potential consequences include quotas, the suspension of trade concessions, and restrictions on market access for specific products.

The Section 301 investigation into South Africa and 59 other economies was launched by the US Trade Representative (USTR) on 12 March 2026. Its aim is to assess whether these economies have failed to enforce bans on importing goods made with forced labour, thereby harming or restricting US commerce.

The evidentiary basis for USTR action, identified in the CRA Client Note of 17 March, can be drawn from the 2025 Trafficking in Persons Report by the US Department of State. The report downgraded South Africa to Tier 2 Watch List, concluding that minimum standards for eliminating human trafficking were not fully met, despite some progress.

The report identified various sectors where trafficking victims, including documented and undocumented migrants from neighbouring countries, as well as vulnerable South Africans, were being exploited. The sectors most exposed to USTR action are those mentioned in the report and linked to export supply chains. Agriculture and mining face high risk due to their role in producing internationally traded commodities. Manufacturing could be affected if forced labour contaminates industrial exports.

Although Section 13 of the Constitution and the Basic Conditions of Employment Act prohibit forced labour, there is no law that bans the importation of goods made with forced labour — the focus of the US probe.

The South African trade minister, Parks Tau, confirmed that Washington had informed Pretoria of the investigation and said that its scope and potential implications were unclear to the South African government.

An immediate AI security risk

On 24 March, attackers from a group known as TeamPCP released corrupted versions of LiteLLM, a widely used tool that helps companies connect to AI services such as ChatGPT, Claude, and Gemini. LiteLLM is downloaded roughly 95 million times a month and is present in a large share of cloud computing environments worldwide.

The attackers uploaded the malicious versions using login details stolen from an earlier attack on a different software product. There was no proper review before the corrupted versions went live. Once installed, the malware gave attackers access to every password, access key, and security credential on the affected machine.

The attack was spotted within hours when poorly written code crashed a developer’s computer. Had it been better designed, it could have remained undetected for weeks. Three days later, on 27 March, the same group used stolen credentials to compromise another software tool.

This reveals a dangerous pattern: each breach can unlock the next. TeamPCP has publicly announced further attacks and links with ransomware operators.

The incident poses a real operational risk for South African companies adopting AI tools, many of whom may not realise these hidden dangers. The compromised tool was often automatically included in other software packages, and organisations moving fastest with AI frequently have the least visibility into what sits underneath.

Government departments are not immune. Just two weeks ago, a ransomware group stole 3.8 terabytes of data from the Gauteng Provincial Government by exploiting poorly maintained systems. As more departments adopt AI, they will face similar supply-chain risks, worsened by outdated infrastructure, limited skills, and slower response times.

Individual users accessing AI via ordinary web browsers or mobile apps were not affected. The attack targeted behind-the-scenes tools used to build custom AI applications and internal systems.

If your business runs AI-enabled tools, review the software components in your systems, avoid automatically installing updates from unverified sources, and regularly rotate all access credentials and security keys. Treat any environment that may have installed the affected versions of LiteLLM as potentially compromised. Failing to act is gambling that the next attacker will be as clumsy as this one.