R14 per litre of petrol ‘promise’

Nearly two years after Minister Gwede Mantashe said diesel and petrol should cost R14 per litre in South Africa, the time has come for the country to urgently overhaul and reform its fuel price regulatory structure.

This comes after the National Treasury announced two more months of fuel price relief for South African motorists amid higher global oil prices resulting from the Middle East war.

On Tuesday, 29 April, the Treasury announced that the temporary R3 per litre reduction in the general fuel levy will be extended to May and, partially, to June.

Similar relief was announced for April, when South Africans were set to face one of the largest fuel price increases in the country’s history.

Large fuel price increases have also been projected for May and, potentially, the months to follow, prompting the Treasury to announce temporary relief for motorists and other fuel consumers.

This relief includes a R3 per litre reduction in the general fuel levy for petrol, and a R3.93 per litre reduction for diesel.

This will reduce the levy charged on diesel to zero, effective from Wednesday, 6 May 2026, to Tuesday, 2 June 2026. 

In addition, the Treasury has proposed halving the relief for June to phase it out before July.

This will see the amount of relief from the general fuel levy reduced to R1.50 per litre for petrol and R1.96 per litre for diesel, effective from Wednesday, 3 June, to Tuesday, 30 June.

In addition to this tax relief, the Treasury also announced that the Department of Mineral and Petroleum Resources has initiated a review of the formula that is used to determine how fuel prices are regulated in South Africa.

This is the latest in a string of statements the government has made over the past few years, committing to a review of South Africa’s pricing formulae for various fuels, with little to show for it.

Mantashe’s R14 per litre of petrol statement

In 2024, current Mineral and Petroleum Resources Minister Mantashe told delegates at the 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,” Mantashe said.

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

He also said his department was in high-level discussions with the National Treasury to find ways to reduce fuel prices.

Mantashe’s statements followed those of President Cyril Ramaphosa in his 2024 State of the Nation Address, in which he announced a review of administered prices in South Africa.

This review was set to include fuel and electricity prices, with the aim that the formulae used to determine them would be analysed and, where possible, improved.

However, very little has come from these statements, with South Africa still using the same formula it has for years to determine the fuel prices motorists pay at the pump.

NWU Business School economist Professor Raymond Parsons recently said it is possible for South Africa to address the ongoing global energy shock without jeopardising its fiscal credibility.

He said this includes the urgent overhaul and reform of South Africa’s fuel price regulatory structure by the ministerial task team.

This team is coordinating the government’s holistic response to mitigate the impact of rising prices on the cost of living, fuel, and food security. However, Parsons emphasised that timelines should be set to finalise this review.

The Bureau for Economic Research’s Tracey-Lee Solomon recently explained which components make up the fuel price in South Africa.

Fuel prices in South Africa are regulated but are composed of multiple components that can vary in response to both domestic and international developments.

The components that make up the price South Africans pay at the pumps include the basic fuel price (BFP), fuel taxes, and wholesale and retail margins.

The BFP is adjusted monthly and reflects the rand-denominated cost of importing refined fuel, which, in turn, is determined by international refined petroleum product prices and the rand exchange rate.

These factors are largely to blame for the significant fuel price hikes South Africa has seen since the Middle East war broke out, as the conflict has seen global oil prices surge and the US dollar strengthen.

South Africa has no control over the BFP, but the other major component of fuel prices at the pump – fuel taxes – is within the government’s control.

The graphic below, courtesy of the Bureau for Economic Research, shows the components that make up the price South African motorists pay at the pump.