Filling a tank now costs more than it ever has in South Africa. Petrol went past a record R30 a litre in October after war in the Middle East sent oil soaring, and more increases are expected in November. Government's answer is R10 billion, moved into a fund meant to take the edge off the next round.
The money is a once-off cash injection into the Equalisation Fund, overseen by the Department of Mineral and Petroleum Resources. When the next increase arrives, the fund absorbs part of it, so drivers don't pay the whole rise at the pump. Unlike April to June's fuel-levy holiday, it is not a tax cut, though it costs government the same.
Why South Africa buys its fuel ready-made
A refinery is the plant that turns crude oil into the petrol and diesel you buy. From 2010 to 2019, only about a quarter of the refined fuel South Africa used came from abroad. Then in 2020, refineries holding almost half the country's capacity closed, and Sapref in Durban, once the largest, went idle in 2022 when Shell and BP stopped running it.
Today local refineries supply about 39% of the country's fuel, against 78% in 2019, by the Central Energy Fund's estimate. The rest arrives by ship, already made, which leaves South Africa open to every global price shock and shipping delay. This year brought exactly that: crude has sat above $100 a barrel for a month.
The bill that shows up in the national accounts
Every litre bought abroad is paid for with money that leaves South Africa, and that lands in the current account, the tally of money flowing in and out. After more came in than went out in the first quarter, it flipped from April to June to a deficit of R205.5 billion at an annual rate, and Business Day puts the swing largely down to a jump in what fuel imports cost.
Bureau for Economic Research economist Tracey-Lee Solomon estimates South Africans could spend an extra R120 billion on fuel this year if they use as much as last year, money that cannot go on groceries or paying off debt. Against that, the R10 billion covers about a twelfth. Nor does Treasury earn more as prices rise, because the fuel levy is a fixed amount per litre.
The slower answer is to refine at home again. The Central Energy Fund bought Sapref for R1 in 2024 and wants it running, which could more than triple the country's refining capacity at a cost of R100 billion to R117 billion. Mantashe wants government, not lenders, to pay, and told a parliamentary committee the shrinking capacity "is a mishap of overly relying on the private sector". OUTA argues the bill is more than the state can afford.
Neither answer is settled yet. The R10 billion is still waiting on Parliament, and the new petroleum plan starts by counting how much refining capacity is left. The next point where Treasury can say more about fuel relief is Wednesday, when finance minister Enoch Godongwana tables his mid-term budget.
