South Africa’s government has confirmed that it will proceed with a comprehensive review of the country’s fuel price formula, reviving plans that could eventually reduce fuel costs for motorists and improve pricing transparency.
The Department of Minerals and Petroleum Resources included the initiative in its 2026/27 Annual Performance Plan, identifying the review as one of its key strategic priorities for the current financial year.
The announcement follows remarks made by Mineral and Petroleum Resources Minister Gwede Mantashe in October 2024, when he argued that South Africans should be paying around R14 per litre for fuel instead of prices exceeding R20 per litre.
According to Mantashe, levies such as the Road Accident Fund (RAF) contribution and the General Fuel Levy have significantly inflated retail fuel prices, making it difficult for consumers to distinguish the actual fuel cost from government-imposed charges.
Government To Examine Every Component Of Fuel Pricing
The department said the review will assess the entire administered pricing system to determine where costs can be reduced without compromising the fuel supply chain.
A major focus will be the Regulatory Accounting System, with detailed evaluations of four key margin structures that contribute to the final pump price:
- Wholesale margins
- Retail margins
- Storage margins
- Distribution margins
Officials will also analyse industry submissions, consumer and producer price indices, exchange rate movements and international fuel pricing benchmarks to identify inefficiencies and determine whether existing margins remain justified.
The department intends to complete the review and submit its recommendations to Minister Mantashe during the current financial year.
Lower Fuel Prices Could Deliver Significant Savings
Should the review ultimately lead to fuel prices approaching the R14-per-litre level suggested by Mantashe, South African motorists could enjoy substantial savings every time they refuel.
Calculations by MyBroadband, based on the official inland fuel prices for June 2026, show that motorists with petrol vehicles fitted with 45 to 55-litre tanks could save between R632.70 and R773.30 per fill.
Drivers of diesel vehicles with similar tank capacities would save between R664 and R811.
Owners of many popular SUVs and crossover vehicles equipped with 60-litre fuel tanks could save approximately R844 on each refill for petrol models, while diesel-powered versions could save around R885.
For larger SUVs and bakkies with fuel tanks ranging from 75 to 80 litres, savings become even more significant. Petrol-powered vehicles could cost between R1,055 and R1,125 less to fill, while diesel models could save between R1,106 and R1,180 per tank.
Although the review represents a significant step towards potential reform, no decision has yet been taken to reduce fuel prices. Any changes would depend on the outcome of the department’s assessment and subsequent government approval.
The review nevertheless signals renewed efforts by government to improve pricing transparency while balancing consumer affordability with the financial sustainability of South Africa’s fuel supply chain.
Source: Department of Minerals and Petroleum Resources; MyBroadband.