The protective shield guarding Emaswati from the full brunt of volatile global energy markets is coming under strain.
Minister of Finance Neal Rijkenberg, in his latest episode of Finance in Focus, has signalled that the Strategic Oil Stabilization Fund, originally projected to provide a nine-month cushion, may see that timeline reduced if global oil prices maintain their current upward trajectory.
During the most recent briefing, Minister Rijkenberg highlighted that the fund was designed to absorb price shocks and prevent the Eswatini economy from experiencing overnight spikes that could derail consumer spending and industrial stability.
However, the math is changing rapidly. While the fund was capitalized to sustain current pricing levels for roughly nine months, the math relied on oil prices remaining within a specific moderate band. With Brent Crude recently surging past $100 per barrel due to geopolitical tensions in the Middle East, the rate of under-recovery, the gap between the landed cost of fuel and the price at the pump is widening.
“The cushion we have built is robust, but it is not infinite,” the Minister noted. “If the global market continues to move against us, the nine-month protection period will naturally contract as we draw down on the fund more aggressively to keep local prices manageable.”
Eswatini’s economic indicators often mirror those of its neighbour, and the latest news from South Africa serves as a stark warning. This week, South Africa’s Department of Mineral Resources and Energy announced a massive fuel price hike effective May 6, 2026:
Petrol (93 & 95) increased by R3.27 per litre, while diesel (0.05% sulphur) increased by R6.19 per litre.
These adjustments in South Africa reflect the brutal reality of rising international procurement costs and a fluctuating Rand. For Eswatini, these regional shifts are a precursor to the pressure the local Stabilization Fund must now absorb.
The Ministry of Natural Resources and Energy recently confirmed that the government had already provided an E334 million cushion in April to mitigate sharp rises. However, with the deficit between import costs and retail prices growing, the burn rate of the Stabilization Fund is accelerating.
The government is currently fast-tracking the construction of the Strategic Oil Reserve Facility at Phuzumoya, which will eventually hold an 80 million-litre capacity to further secure the nation’s energy future.
“For now, there is nothing to worry about because the fund is doing exactly what it was designed to do, it is taking the hit so the consumer doesn’t have to,” Rijkenberg noted.