Our focus: Contribute to policy formulation, implementation and a fair regulatory framework for all The liquid fuels industry in South Africa is highly regulated. Current licensing requirements and regulations cover, among other things:
- Importation and exportation of crude oil
- Importation and exportation of petroleum products
- Importation and exportation of blending components
- Operation of petroleum pipelines, including setting of tariff structures
- Operation of storage facilities and loading facilities, including approval of tariff structures
- Manufacturing of petroleum products
- Wholesale of fuels
- Retailing of fuels, including the pump price of petrol by grade and location
- Recovery of transport costs
- Liquefied petroleum gas refinery gate price
- Retail price for illuminating paraffin
- Retail and wholesale margins
- Petroleum products specifications and standards
Priority Areas
Clean Fuels II (CF2)
South Africa is preparing for the transition to Clean Fuels II (CF2), which requires ultra-low sulphur fuels and enhanced fuel quality standards by 1 September 2027. This supports national decarbonisation and energy transition goals.
With fuel prices regulated, clean fuel costs must be visible, verified, and fairly reflected, supported by:
- Strong cost monitoring
- Transparent price reporting
- Public awareness of benefits to health, air quality, and emissions
Customs and Excise
As South Africa shifts to a net importer of fuel, importing companies face growing challenges in meeting supply obligations under existing regulations. A modern and practical approach to fuel-related legislation is needed, with engagement directly with the South African Revenue Service (SARS) to drive meaningful change. The focus is on creating a regulatory framework that supports efficient, compliant, and safe movement and storage of fuel products while aligning with contemporary supply chain practices.
Diesel Adulteration
Among the priorities in fuel price regulation is addressing diesel adulteration—the illegal mixing of paraffin or similar substances with diesel. This practice has significant implications:
- Financial Strain on the Fiscus: Adulteration results in substantial revenue losses. Since 2019, the illegal mixing of diesel with untaxed paraffin has surged, resulting in annual revenue losses of R4.2 billion in 2023 alone.
- Market Distortion: Adulteration undermines fair competition, harming legitimate operators in the fuels industry.
- Equipment Damage: Engines run on adulterated diesel are at risk of damage, creating safety hazards and higher maintenance costs.
- Urgent Policy Intervention Needed: Decisive action is required to eliminate the incentive for diesel adulteration and recover lost revenue.
The Regulatory Accounting System (RAS)
The Regulatory Accounting System (RAS) is a key tool used by the Department of Mineral and Petroleum Resources (DMPR) to determine fair retail petrol prices. It is a uniform and transparent set of regulatory accounts, for a regulated business, where are costs allocated according to predetermined methods and return on assets invested is appropriately rewarded, thus providing certainty to related investors.
The RAS covers all activities beyond the refinery gate, including:
- Secondary Storage
- Secondary Distribution
- Wholesale
- Service Station Retail
Our role is to support the DMPR as it reviews and updates the current RAS system and this work is aimed at enhancing the model’s accuracy, transparency, and responsiveness, ensuring it remains a robust tool for determining retail petrol prices.
By strengthening RAS, the Department is able to set petrol prices that achieve a careful balance between supporting the sustainability of the petroleum industry and protecting consumers from excessive costs. Our contribution helps create a pricing framework that is:
Accurate: Reflecting true costs and market dynamics.
Transparent: Providing clear, verifiable methodology for pricing decisions.
Responsive: Quickly adapting to changes in costs, supply, and policy.
Balanced: Supporting industry viability while safeguarding consumer interests.
Through this initiative, the RAS serves as a key instrument for fair, transparent, and effective fuel pricing, helping to stabilize the sector and build public trust.
Liquefied Petroleum Gas
We support the development of a transparent and effective price regulation framework for Liquefied Petroleum Gas (LPG), ensuring that pricing is fair, accountable, and consistent across the industry. A robust regulatory framework helps protect consumers, maintain industry sustainability, and foster confidence in the LPG market.
We further focus on strengthening industry compliance and reducing illegal cylinder filling activities. By addressing these challenges, we help create a safer, more reliable LPG supply chain, ensuring that LPG reaches consumers in a lawful and efficient manner.
Key Objectives:
Transparent pricing: Establish clear and verifiable methods for determining LPG prices.
Market compliance: Encourage adherence to regulations and reduce illegal practices.
Industry development: Promote a stable and sustainable LPG market that attracts investment and supports growth.
Through these initiatives, we contribute to a regulated, trustworthy, and sustainable LPG market, strengthening public confidence and supporting the long-term development of the energy sector.
