South Africa’s ‘R14 per litre of petrol’ promise

Mineral and Petroleum Resources Minister Gwede Mantashe’s discussions about reducing the price of petrol and diesel have yielded no results.

A year ago, Mantashe told delegates at the 2024 Africa Oil Week Conference that petrol and diesel should cost R14 per litre.

“The price of fuel is part of the cost of living. When the fuel price increases, the cost of living in South Africa also rises. This is not good for society,” he said.

He stated that the Mineral and Petroleum Resources Department was in discussions with the National Treasury to reduce fuel prices.

To make life more affordable for South Africans, the government initiated discussions on reducing administered prices to cut electricity and fuel prices.

“The state must intervene to bring energy prices down in the interest of the South African community,” Mantashe told delegates.

The discussions include whether it is wise to include the fuel levy and road accident fund levy in the price of petrol and diesel.

The minister said they are trying to conclude the discussions regarding the fuel price and administered prices “in the shortest possible time”.

Mantashe’s comments did not come out of the blue. President Cyril Ramaphosa also highlighted the need to reduce fuel costs.

In his July 2024 opening address to Parliament, he stated that the government would undertake a comprehensive review of the fuel price formula.

This review aimed to identify areas where prices could be reduced. Simply put, the government aimed to reduce petrol prices by modifying the fuel price formula.

He reiterated the plan in his 2025 State of the Nation Address (SoNA), repeating the government’s commitment to tackling the high cost of living.

This commitment included an undertaking to conduct a “comprehensive review of administered prices, including the fuel price formula”.

Mantashe also told Parliament last year that the Cabinet announced a Ministerial Task Team to ‘holistically review the fuel pricing formulae’.

The fuel levy moved in a different direction

Despite the promises from Mantashe and Ramaphosa to review the fuel price formula to cut petrol and diesel prices, the opposite has happened.

In his May 2025 Budget, Finance Minister Enoch Godongwana announced an inflationary increase in the general fuel levy. This was the first time in three years that the fuel levy was adjusted.

Over the previous three years, the fuel levy has remained unchanged, despite inflation, resulting in tax relief of approximately R11.5 billion.

However, after the withdrawal of the VAT rate increase proposal, the inflationary adjustment of the fuel levy was needed to maintain the real value of the levy.

Godongwana said he expected the positive revenue impact due to the removal of this relief to be estimated at R3.5 billion.

In his Medium Term Budget, the Finance Minister revealed that the General Fuel Levy collections exceeded estimates for the first half of the 2025/2026 financial year.

Collections of R44.7 billion were R2.1 billion higher than in the prior year and exceeded the printed estimates by R2.3 billion.

Fuel declarations for April to September 2025 recorded a total year-on-year net growth of 2.1% in volume.

Godongwana highlighted that the objective of the fuel levy is to raise revenue to fund the government’s general expenditure programmes.

“It contributes towards the government’s environmental goals and advances the progressivity of the fiscal system,” he said.

This includes the construction and maintenance of roads, as well as support for public transportation. Revenue is also shared with metropolitan municipalities.

The reality is that the fuel levy is an important revenue stream for the government, and it is challenging to raise this money through other means.