The South African government is finally going ahead with its plan to review the nation’s fuel price formula to find areas where it could reduce the cost for motorists.
This is something that the government proposed two years ago, though no meaningful results have been produced thus far.
In 2024, the Minister of Mineral and Petroleum Resources, Gwede Mantashe, said that motorists should only be paying R14 per litre for petrol and diesel in South Africa.
He pointed out that add-on taxes like the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy had distorted fuel prices to well over R20 per litre.
“Our argument is: you are distorting the price of fuel. Let’s find the formula to separate these things and have the price of fuel visible,” Mantashe said.
Two years later, and South Africa is facing petrol and diesel prices of over R30 per litre due to the surge in oil prices caused by the war in the Middle East.
Our sister publication MyBroadband asked Mantashe’s department for an update on the plan to review the price policy and the R14-per-litre figure, given the alarming uptick in fuel prices, but it hadn’t responded by the time of publication.
In June 2026, the Department of Mineral and Petroleum Resources’ Annual Performance Plan for 2026/2027 revealed that it was proceeding with its review of the nation’s fuel price formula.
It outlines that the review should be completed in the current financial year, and should be finalised before 31 March 2027.
The Annual Performance Plan said the review is a critical strategic intervention, noting that 2026’s fuel prices are putting household budgets under intense pressure.
The department plans to conduct a comprehensive review of administered prices, including the fuel price formula, to find ways to reduce the burden on motorists.
It explained that it would examine the Regulatory Account System and four key margins that influence the pump price of fuel, which are:
- Retail
- Storage
- Wholesale
- Distribution
Mantashe said his department would require extensive data for the review, gathering information from industry submissions, consumer and product price indices, exchange rates, and international benchmarks.
No more R3 per litre petrol price cut
While the government is reviewing the fuel price formula in an effort to reduce costs for consumers, this plan is months, if not years, away from yielding results, doing nothing to address the current high prices brought on by the Iran war.
Earlier this year, the government cut the GFL by R3 per litre to offset the massive petrol and diesel price hikes that occurred when the United States and Iran first started fighting in March.
This measure was implemented in April and later extended to May. However, it has since been completely removed.
Unfortunately, prices have continued to climb in the months since the war began, as petrol now costs R27 per litre and is likely to reach R29 per litre or higher this October unless the Middle East stabilises.
Civil action organisation AfriForum has written to Finance Minister Enoch Godongwana, asking him to make the GFL cut permanent or, at the very least, extend it to protect consumers.
However, the minister explained that the state cannot fully insulate citizens from the global spike in oil prices.
“Government cannot fully insulate consumers from a sustained increase in international oil prices as South Africa is a net importer,” Godongwana said in response to Parliamentary questions.
“Permanently offsetting these increases through the budget would ultimately shift the cost to taxpayers or increase government borrowing.”
In other words, even if the government were to bring back the GFL cut, the National Treasury would need to find another way to recover the lost revenue.
“Further intervention would need to balance immediate relief to households and businesses against the severity and duration of the shock, and the available fiscal space, while preserving fiscal sustainability,” he said.
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