Staff Reporter
Mineral and Petroleum Resources Minister Gwede Mantashe said on Tuesday that South Africa’s temporary fuel levy relief was not a lasting answer to the country’s exposure to global oil shocks.
“We are tabling this budget vote during a difficult period in the global economy. A time when conflict rages in the Middle East with its tremors felt far beyond its frontlines, destabilising global energy supply chains and casting a long shadow over our own economic recovery,” he said.
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“In this era, where energy security is intrinsically linked to national stability, we cannot stand on the side lines and be passive observers.”
Mantashe was tabling the budget vote for the Department of Mineral and Petroleum Resources, which has been allocated R2.86 billion for the 2026/27 financial year. Of this, R1.17 billion will be transferred to public entities and strategic programmes supporting mining regulation, exploration, mine rehabilitation and transformation initiatives.
Mantashe said government had worked with National Treasury to introduce temporary relief through a reduction in the fuel levy from April to June, but added that the measure did not deal with the country’s dependence on imports.
“Whilst South Africans have welcomed this intervention, we are fully aware that it is not a permanent solution. The reality confronting us is that South Africa remains overly dependent on imported refined petroleum products,” he said.
“It is neither sustainable nor just for a country with significant mineral and petroleum potential, such as ours, to remain exposed to external supply shocks in this manner.”
Mantashe said South Africa’s vulnerability strengthened the case for developing the upstream petroleum industry and expanding refining capacity, despite opposition from environmental groups.
“This is precisely why our sustained focus on developing the Upstream Petroleum Industry and expanding our refining capacity remains correct, despite persistent pressure from certain environmental lobby groups. The fact remains that petroleum security is not a theoretical debate, but an economic necessity and a national imperative,” he said.
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He said the processing of the South African National Petroleum Company Bill should be accelerated to allow the state to play a bigger role in the oil and gas sectors.
He said the country was not facing an immediate fuel shortage.
“While global fuel supply challenges persist, I would like to assure the people of South Africa that we have sufficient fuel supply to meet demand, and that our fuel supply remains stable.”
“Working closely with industry stakeholders, we continue to monitor the supply situation and will ensure ongoing transparency in this regard.”
Regarding mining, Mantashe said the sector remained a pillar of the economy, with mining Gross Value Add reaching R477 billion in 2025 and contributing about 6.3% to gross domestic product.
He said mining royalties collected by the fiscus rose to about R11.8 billion in 2025 from R10.6 billion in 2024.
But he said that increasing electricity costs were putting pressure on mining operations and weakening South Africa’s ability to beneficiate its minerals locally.
“Rising electricity tariffs continue to place severe operational pressure on mining companies, particularly deep-level gold and Platinum Group Metal (PGM) operations,” he said.
Mantashe said the country’s Critical Minerals and Metals Strategy depended not only on exploration, but on building local processing and manufacturing capacity.
“However, this ambition continues to be undermined by the high cost of electricity, particularly within the ferroalloy industry, which remains among the hardest hit.”
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He said affordable electricity had become central to whether South Africa could capture more value from its mineral wealth.
“The reality is that South Africa cannot fully realise the benefits of local beneficiation until the issue of affordable electricity is resolved,” he said.
“This remains a central focus of the whole-of-government approach involving the DMPR, the Department of Electricity and Energy, National Treasury, the Department of Trade, Industry and Competition, and the Presidency.”
