Gwede Mantashe Outlines Plans for Energy Price Interventions and Regulatory Reforms at Africa Oil Week 2024

Minister Mantashe announced that the Upstream Petroleum Resources Development Bill, recently passed by both Houses of Parliament, is now ready for assent by President Cyril Ramaphosa.

The South African government is actively engaged in discussions aimed at reducing administered prices, including fuel costs, as part of broader efforts to address the rising cost of living. This was announced by Minister of Mineral Resources and Energy, Gwede Mantashe, during his address at Africa Oil Week 2024, held in Cape Town on Tuesday.

Mantashe stressed that fuel prices have a direct impact on the daily lives of South Africans. "When the price of fuel rises, so does the cost of living, which negatively affects our society. To make life more affordable for all South Africans, we have begun discussions on reducing administered prices, including fuel and electricity," he said.

The Minister explained that the price of fuel is not only influenced by global oil markets but also by several levies, such as the general fuel levy and the Road Accident Fund (RAF) levy, both of which are linked to fuel prices. "Our argument is that these additional costs distort the actual price of fuel. We need to find a formula to separate these levies so that the price of fuel is transparent. This way, any government interventions in fuel pricing will be more visible," Mantashe added.

He assured that these discussions are being treated with urgency and that the government intends to conclude them in the shortest possible time to provide relief to South Africans.

Developing South Africa’s Petroleum Industry

Beyond addressing fuel prices, the government is making strategic moves to strengthen and develop the country’s petroleum resources, with the goal of promoting equitable growth and boosting the economy. Minister Mantashe announced that the Upstream Petroleum Resources Development Bill, recently passed by both Houses of Parliament, is now ready for assent by President Cyril Ramaphosa.

“This is a historic milestone as the Upstream Petroleum Industry has always been regulated as an appendage to other sectors. The new bill will ensure the orderly development of the industry and could significantly contribute to South Africa’s economic growth," Mantashe said. He highlighted Namibia’s recent economic boost, which saw the potential to double its economy by 2040 following major oil and gas discoveries, as an example of what South Africa could achieve with its petroleum resources.

Establishing the South African National Petroleum Company (SANPC)

As part of the government’s efforts to ensure South Africans benefit from the country’s petroleum resources, the South African National Petroleum Company (SANPC) has been established. The SANPC will carry the State’s share in petroleum projects and independently exploit some resources. The SANPC Bill is currently undergoing Cabinet processes before being submitted to Parliament for consideration.

"The SANPC will become a leading player in the country’s petroleum sector, ensuring energy security and driving economic growth," Mantashe explained. He also underscored the importance of fostering partnerships within the petroleum industry to further enhance development opportunities.

Transformation and Regulation in the Petroleum Sector

In addition, the government is pushing forward with the Petroleum Products Amendment Bill, which is also under review by the Cabinet. This bill aims to transform and regulate the petroleum and liquid fuels sector, with three primary objectives:

Promote equity and participation in the sector.

Ensure proper regulation of individuals involved in the manufacturing and sale of liquid fuels.

Foster economic development through contributions from the petroleum industry.

Mantashe emphasized that these legislative changes will create a more inclusive and regulated industry, boosting investor confidence while contributing to national development.

The Minister concluded by reaffirming the government's commitment to ensuring that the benefits of South Africa’s petroleum resources are felt by its citizens, stating that these developments are part of a larger plan to achieve sustained economic growth and energy security.