Finance Minister Enoch Godongwana confirms the Department of Mineral and Petroleum Resources has initiated a review of the fuel price formula, which will determine how fuel prices are regulated.
Image: Armand Hough / Independent Newspapers
Finance Minister Enoch Godongwana has again put his foot down on the calls to introduce a wealth tax for the “super-rich” and nationalise key strategic sectors of the economy amid measures to quell the fuel price increases and cost-of-living pressures on the working class.
Godongwana confirmed that the Department of Mineral and Petroleum Resources will review the fuel price formula in this financial year.
Responding to recent parliamentary questions from EFF MP Carl Niehaus, he acknowledged that the Middle East conflict resulted in disruptions to the global crude oil supply, which has significantly impacted domestic fuel prices.
He said the government had delayed the planned fuel levy adjustments announced in the 2026 Budget and implemented short-term fuel levy relief to cushion fuel consumers and households from higher fuel and food prices.
“The relief measures are expected to cost around R17.2 billion in foregone revenue,” he said.
Godongwana also said there were a number of additional measures in the tax system to reduce the impact of high fuel prices.
These included the diesel refund system, which provides full or partial relief for the general fuel levy and the Road Accident Fund levy to primary producers.
“In addition, the Department of Mineral and Petroleum Resources has initiated a review of the fuel price formula, which will determine how fuel prices are regulated going forward,” said Godongwana.
The review has been in the pipeline since Minister Gwede Mantashe, in October 2024, indicated that motorists in the country should be paying around R14 per litre of fuel.
The Department of Mineral and Petroleum Resources sets out in the annual performance plan (APP) the process to be followed in the review of the fuel price formula in the financial year ending in March 2027.
Mantashe said in the APP that they were driving stabilisation and reform through an integrated development plan, review of the fuel pricing framework, and measures to support domestic refining capacity as critical steps towards a secure, reliable, and affordable energy future.
“The finalisation of the petroleum sector development plan, including the pricing framework, is key in ensuring that a South African demand-and-supply petroleum sector plan is developed to support investment in this sector,” Mantashe said.
The document said progress has been made on developing a pricing framework to incentivise local refining, for which approvals will be sought in the 2026/27 cycle.
“Together with the Central Energy Fund and its subsidiaries, the department is committed to partnering with the private sector to ensure long-term investment in the sustainability of SA’s domestic petroleum market,” reads the document.
The department has set out a timeline for the review process to be undertaken.
The APP states that a report on the wholesale margin review will be completed in the first quarter of the financial year, followed by another on the reviewed storage and distribution margin in the next quarter.
The report on the reviewed retail margin will be submitted in the third quarter, and then the reviewed fuel price formulae will be submitted to Mantashe for approval before next March.
At least R21.1 million has been allocated towards the petroleum compliance monitoring, enforcement, and fuel pricing.
Meanwhile, Godongwana said the government was not discussing nationalising key sectors of the economy.
“South Africa's economic policy seeks to achieve inclusive growth, job creation, and improved service delivery through a mixed economy in which both the public and private sectors play important roles.
“Where state-owned entities operate in strategic sectors, reforms are aimed at improving their performance, governance, and financial sustainability,” he said, adding that the government was pursuing reforms to encourage private investment, increase competition, and expand participation in the economy.
Godongwana further stated that the country has several instruments that tax wealth through a combination of taxes - financial, real estate, and land.
“Income tax is the most effective way to tax the wealthy, and it generates multiple times more revenue for the fiscus more efficiently and cost-effectively.”
Godongwana added that the 2026 Budget notes that the top 13% of taxpayers contribute 60% of total personal income tax revenue.
“It is this tax base that will be most at risk of relocating with the introduction of a wealth tax.”