The Department of Minerals and Petroleum Resources is finally following up on its promise to review South Africa’s fuel price formula to reduce the cost of petrol and diesel.
Back in 2024, the department’s minister, Gwede Mantashe, stated that motorists should be paying R14 per litre of fuel.
He argued that fuel prices in South Africa had been distorted to over R20 per litre due to increases in taxes such as the General Fuel Levy and the Road Accident Fund Levy.
“So, instead of buying a litre of fuel for R14, you buy it for R20. 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,” he said.
The minister said at the time that his department intended to review the fuel price formula to address the issue as quickly as possible.
However, almost two years have elapsed since Mantashe made these comments in October 2024, with no updates on its progress.
This finally changed with the release of the Department of Minerals and Petroleum Resources’ Annual Performance Plan for 2026/2027, revealing that the review of South Africa’s fuel price formula will proceed.
It states that a target to complete the review has been set for the current financial year, and that this is a critical strategic intervention to alleviate the pressure that high fuel prices have placed on households.
The plan is to conduct a comprehensive review of administered prices, including the fuel price formula, to identify where pricing can be reduced.
In particular, the examination will focus on the Regulatory Accounting System, breaking down the four central margin structures that make up the cost of petrol and diesel: wholesale, retail, storage, and distribution.
The department said the process will require thorough data collection, looking at industry submissions, consumer and producer price indices, exchange rates, and international benchmarking.
It explained that this would help it to identify inefficiencies and justify margin reductions. The department intends to complete and submit its review to Mantashe in the current financial year.
Over R1,000 in fuel savings for motorists
If the department were to deliver on Mantashe’s R14 per litre petrol and diesel statements, motorists would save an astronomical amount on fuel each month.
TopAuto looked at the cost of filling up different tank sizes at June’s current fuel prices, compared to the R14 target proposed by the minister.
Owners with small petrol cars would see a reduction of around R632 per top-up, while larger crossovers and SUVs could save up to R1,124.
It’s a similar story with diesel, where large bakkies with 80-litre tanks could save R1,180 per trip to the pump.
The following tables show the breakdown of petrol and diesel costs at June’s prices compared to the target of R14 per litre.
The figures used reflect the inland cost of petrol 95 and diesel 0.05%. Note that the diesel calculations are based on the wholesale value, as final retail prices can vary between service stations
Petrol
| Tank size | Cost to fill (June 2026) | Cost to fill at R14 per litre | Difference |
|---|---|---|---|
| 45 litres | R1,262.70 | R630.00 | R632.70 |
| 50 litres | R1,403.00 | R700.00 | R703.00 |
| 55 litres | R1,543.30 | R770.00 | R773.30 |
| 60 litres | R1,683.60 | R840.00 | R843.60 |
| 75 litres | R2,104.50 | R1,050.00 | R1,054.50 |
| 80 litres | R2,244.80 | R1,120.00 | R1,124.80 |
Diesel
| Tank size | Cost to fill (June 2026) | Cost to fill at R14 per litre | Difference |
|---|---|---|---|
| 45 litres | R1,293.75 | R630.00 | R663.75 |
| 50 litres | R1,437.50 | R700.00 | R737.50 |
| 55 litres | R1,581.25 | R770.00 | R811.25 |
| 60 litres | R1,725.00 | R840.00 | R885.00 |
| 75 litres | R2,156.25 | R1,050.00 | R1,106.25 |
| 80 litres | R2,300.00 | R1,120.00 | R1,180.00 |
Loading ...
