The government of Eswatini has spent over E613 million since February 2026 to mitigate the impact of rising international oil prices on local consumers. This expenditure was made through the Strategic Oil Reserve Fund, according to Minister for Natural Resources and Energy, HRH Prince Lonkhokhela. The fund was used to shield consumers from the full impact of international fuel price increases. Eswatini's reliance on imported fuel has left the country vulnerable to global oil market fluctuations.
Eswatini imports 100 per cent of its fuel products, making it susceptible to international oil market shocks. The recent spike in international oil prices has significantly increased the cost of importing fuel into the country. This has resulted in severe under-recoveries across all domestic fuel products, reaching as high as E4.80 per litre by the end of September 2026. The government has been absorbing part of these costs through the Strategic Oil Reserve Fund since February 2026.
The prolonged volatility and mounting under-recoveries have put the Strategic Oil Reserve Fund under significant financial pressure. This has made it increasingly difficult for the government to continue cushioning consumers at the same level. As a result, a domestic fuel price adjustment has become unavoidable to ensure the sustainability of the country's fuel supply and prevent widespread shortages. The adjustment is a response to exceptional international market conditions.
Despite the new adjustments, the government has taken steps to mitigate the impact on critical sectors. Particular attention has been paid to the price of diesel, which is essential to the transportation and agricultural sectors. The government has ensured that the price of diesel does not increase in line with market dictates, given its significant impact on these sectors.
In the short to medium term, the government is pursuing measures to reduce the country's exposure to international fuel price shocks. One such initiative is the Strategic Oil Reserve Facility at Phuzamoya, which is expected to help mitigate high fuel prices once completed. The government is also exploring ethanol blending with unleaded petrol, following a successful pilot programme.
The Ministry of Natural Resources and Energy has submitted relevant regulations to Parliament to facilitate ethanol blending. Additionally, the ministry intends to work with the oil industry to explore the possibility of partial deregulation of fuel prices. This move aims to create a more sustainable fuel market in Eswatini.
The government will continue to monitor international oil prices, which remain highly volatile. Minister Prince Lonkhokhela has urged consumers to use fuel efficiently as the country navigates the ongoing uncertainty in the international oil market. The government's efforts aim to balance the need to shield consumers from price hikes with the need to ensure a sustainable fuel supply.
Key points
- The government of Eswatini has spent over E613 million to cushion consumers from rising international oil prices.
- Eswatini imports 100 per cent of its fuel products, making it vulnerable to global oil market fluctuations.
- The government is pursuing measures to reduce the country's exposure to international fuel price shocks, including the Strategic Oil Reserve Facility at Phuzamoya and ethanol blending with unleaded petrol.
