While temporary fuel price relief measures have concluded, systemic relief may be on the horizon.
The Department of Mineral and Petroleum Resources has officially initiated a formal review of the regulated fuel price formula. This review is set to evaluate retail margins and pricing structures to permanently reshape how domestic fuel costs are determined in the future.
The details of this major policy shift were revealed by Transport Minister Barbara Creecy in a series of comprehensive written parliamentary replies, signaling a move from short-term financial firefighting to deep structural reform
Creecy outlines the case for formula reform
In her submissions to parliament, Minister Creecy highlighted that tackling the actual structure of fuel pricing is essential for long-term economic stability. By interrogating retail margins and pricing frameworks, the government intends to find sustainable ways to lower the baseline costs of petrol and diesel.
As Creecy noted, relying on temporary tax cuts is highly draining on the national fiscus, making a fundamental redesign of the pricing mechanism the most viable path to protect the working class and vulnerable sectors from future economic shocks.
The urgency behind this formula review is underscored by the sheer scale of the emergency relief measures that Creecy detailed in her replies.
When geopolitical conflict flared up in the Middle East in February 2026, global crude supply chains were severely disrupted. This suddenly reversed a period of stabilising local fuel prices that South Africans had been enjoying due to a stronger Rand and lower crude costs.
To prevent soaring transport and food prices from devastating households, Creecy explained that the government froze its planned 2026 Budget adjustments and sacrificed R17.2 billion in foregone revenue to fund a dramatic, three-month fuel levy holiday
With those monthly cuts now concluded, Minister Creecy confirmed that the state is leaning on an established layer of tax exemptions to steady the economy while the pricing formula review gets underway.
Transport fuels remain entirely zero-rated for VAT, operating alongside the zero-rating of 21 basic food groups to protect low-income households.
Creecy pointed to the Diesel Refund System as a vital shield against runaway food inflation. Under this framework, the agricultural sector receives a 100% refund on the Road Accident Fund (RAF) levy and a 40% refund on the general fuel levy for eligible diesel purchases.
To offer further relief, these diesel refunds were recently extended to commercial food manufacturers – buying the state crucial time as it looks to permanently rewrite the rules of the pump.
Meanwhile, Creecy also stated that the Department of Transport and the RAF are reviewing funding options, which include a proposed mandatory fee attached to annual licence disc renewals and vehicle registrations.
The review aims to address a long-term funding crisis, as revenue from the traditional fuel levy is expected to decline due to the increasing adoption of electric vehicles (EVs). However, the proposal faces heavy pushback. Critics, including the Automobile Association (AA) and opposition parties like the DA, argue that the RAF’s primary issues stem from mismanagement rather than a lack of revenue.
AfriForum has warned that petrol and diesel drivers could end up paying twice – once at the fuel pump and again during licence renewal
