G7’s 100 Million-Barrel Fuel Release Opens a Four-Month Window for Africa’s Inflation Fight

G7 countries agreed on October 2 to release another 100 million barrels from emergency petroleum reserves as disruption to Middle East energy supplies continues.

The stocks are due to enter the market over four months, including a large diesel release in the first 20 days.

The decision follows a 400 million-barrel emergency release coordinated by the International Energy Agency in March after the war disrupted Middle East oil supplies.

G7 governments are returning to their reserves as crude shipments from the region remain below levels recorded before the conflict.

Brent crude fell 1.1% to $101.23 a barrel after the announcement, while recovering Middle East exports added more supply to the market.

U.S. diesel futures were down 3.25% at $4.49 a gallon as governments prepared the new reserve release.

The price movement reaches African economies through petroleum imports. The median African country spends 3.6% of GDP importing gasoline and diesel, according to the World Bank, a larger share than in any other region.

Higher Oil Prices Have Raised Africa’s Fuel Import Costs

Kenya’s mineral fuel imports reached 152.2 billion shillings in May, more than double the 68.8 billion shillings recorded in January. The monthly bill fell to 108.6 billion shillings in July as the earlier rise in petroleum costs eased.

South Africa paid more for imported petroleum products in the second quarter as prices for diesel, petrol and aviation kerosene increased.

Crude oil imports also rose during the quarter, according to the South African Reserve Bank, while the country’s current account moved from a surplus of 2.3% of GDP in the first quarter to a deficit of 2.6%.

Uganda’s shilling fell to a record low this week as importers increased their demand for dollars, with energy companies among the largest buyers.

The currency traded at 4,050 per dollar on Wednesday after losing about 8% since the start of the Middle East conflict.

The International Energy Agency expects global oil supply to average 100.7 million barrels a day in 2026, 5.7 million bpd below last year’s level. Middle East supply is expected to recover fully in 2027.

Africa’s Road Dependence Carries Fuel Costs Into Food Prices

Road transport consumes about 80% of imported fuel across Africa, according to the World Bank.

South Africa raised wholesale diesel prices by R2.93 a litre for 500ppm and R3.14 for 50ppm in September, taking inland prices to R29.11 and R30.05 a litre.

Fuel accounts for between 35% and 55% of operating costs for South African road freight companies, depending on the vehicle and route.

The Road Freight Association said the September diesel increase raised operating costs for transport companies.

Between 80% and 90% of goods across Africa travel by road. Transport can account for as much as 45% of the retail price of maize, rice and cassava in parts of the continent, according to the World Bank.

Kenya’s food and non-alcoholic beverage prices rose 8.4% in the year to September, while transport prices increased 15.6%.

African Fuel Prices Are Still Carrying the Earlier Oil Shock

Zambia raised petrol prices by 24% on October 1, from K25.29 to K31.46 a litre, while diesel increased from K26.86 to K33.27.

The adjustment followed the expiry of an excise-duty waiver that had kept September pump prices unchanged.

Kenya entered October with maximum fuel prices fixed at their previous monthly levels. Petrol remained at KSh214.03 a litre in Nairobi and diesel at KSh217.86 for the pricing period ending October 14.

The two markets entered October under different pricing arrangements. Zambia’s tax waiver had absorbed part of the earlier increase in petroleum costs before it expired, while Kenya’s regulated prices remained in place until the next monthly review.

Fuel prices already recorded in national inflation data leave the next round of price reviews extending beyond the initial fall in international petroleum prices.

Zambia’s October increase is now part of the domestic price base, while Kenya’s next regulated adjustment is due after the current pricing period ends.

Africa Enters 2027 With Energy Inflation Still in the Data

The World Bank expects median inflation in Sub-Saharan Africa to rise to 4.8% in 2026 from 3.7% last year. It cited spillovers from the Middle East conflict among the factors behind the increase.

South Africa raised its policy rate to 7.25% in September, with higher fuel prices among the inflation risks cited by the central bank.

Ghana kept its policy rate at 14% during its September meeting and continued to flag risks from global conditions.

Gulf oil exports averaged about 13 million barrels a day in August, roughly half their pre-war level, according to the International Energy Agency.

Diesel and gasoil exports averaged 390,000 barrels a day as refinery operations across the region remained disrupted.

The emergency release runs into early 2027, while the recovery of Middle East petroleum supply remains incomplete.

How much production, refining capacity and export traffic has returned when those releases stop will shape the oil market African economies face