Government considers reducing administered prices, including petrol

The government is in discussions to intervene in reducing administered prices, including petrol, in South Africa.

This was stated by Minerals and Petroleum Resources Minister Gwede Mantashe while delivering the welcome address at Africa Oil Week 2024 in Cape Town, today.

Mantashe explained that fuel prices directly influence the cost of living for South Africans.

“If the fuel price goes up, the cost of living increases, which is not good for our society. To make life more affordable for all South Africans, we have begun discussions on reducing administered prices, including fuel and electricity. These discussions include, but are not limited to, the general fuel and Road Accident Fund levies.

“In the fuel price, there is the general fuel levy and the Road Accident Fund linked to the price of fuel. Our argument is that these distort the price of fuel. Let’s find a formula to separate them, so the fuel price remains visible, and when there is intervention in the fuel price, we can see it,” the minister said.

He stated that the government intends to conclude these discussions ‘in the shortest possible time’.

Boosting economic growth

Mantashe said the government is making concerted efforts to develop the country’s petroleum resources equitably.

In this regard, he noted that the Upstream Petroleum Resources Development Bill is ready for assent by President Cyril Ramaphosa after passing both Houses of Parliament.

“This is the first of its kind in South African history, as the Upstream Petroleum Industry has always been regulated as an appendage to other industries.

“We are convinced that once the bill is enacted into law, it will pave the way for orderly development of the Upstream Petroleum Industry and boost the country’s economic growth to 8%, similar to Namibia, which aims to double its economy by 2040 on the back of its recent discoveries of oil and associated gas,” he said.

The South African National Petroleum Company (SANPC) has also been established to ‘ensure that South Africans enjoy maximum benefits from their national resources and to carry the State share in petroleum projects while exploiting some resources independently’.

“The [SANPC] Bill is undergoing Cabinet processes before its onward transmission to Parliament for consideration and adoption. Enacting the bill into law will enable the SANPC to operate as South Africa’s leading player in the petroleum industry, ensuring energy security, fostering partnerships, and propelling economic growth based on petroleum resources.

“Additionally, the Petroleum Products Amendment Bill is also undergoing Cabinet processes for approval to publish for stakeholder comments. The bill aims to promote transformation in the petroleum and liquid fuels sector by encouraging participation and equity; to ensure that individuals involved in the manufacturing or sale of liquid fuels are regulated; and to ensure that the petroleum sector contributes to the country’s economic development,” Mantashe said. – SAnews.gov.za