Mantashe Blames the War for R30 Petrol, but Levies Tell More

Inland petrol in South Africa now costs more than R30 a litre for the first time. This week the minister responsible for fuel pricing said, in effect, that his government should not take the blame. The uncomfortable part for critics is that the oil and shipping numbers largely support him.

Mineral Resources and Petroleum Minister Gwede Mantashe made the argument in his closing address at the Joburg Indaba, days after the Department of Mineral and Petroleum Resources (DMPR) confirmed record increases to South Africa’s fuel prices, effective 7 October 2026. He told the audience the government was being blamed for something it did not cause.

For Australian investors holding dual-listed South African miners or energy exposure, the question of who owns the price is not academic. It decides whether relief, tax stability or sustained cost pressure comes next.

Here is how the record price splits between the global shock and the domestic structure, and what that split means for mining costs and policy risk.

Is Mantashe right that the Middle East war is to blame for the pump price?

Mantashe’s case is simple. A war outside South Africa’s borders, centred on the Strait of Hormuz, has pushed oil above US$100 a barrel, and that cost shows up at the pump. He added that oil prices also weigh on the rand-dollar exchange rate, and pointed back to the Russia/Ukraine conflict as an earlier example of the same pattern.

Gwede Mantashe, Minister of Mineral Resources and Petroleum The government, he said, is being blamed for something it did not cause, according to reporting by Martin Creamer of Mining Weekly.

The evidence stacks up behind him. Brent sat around US$72 a barrel before the conflict, spiked above US$130 in April and was trading just under US$100 in early October, though some data places it slightly above that level. Hormuz flows collapsed from about 20 million barrels a day to an average of 2.7 million in March-May 2026, and the International Energy Agency (IEA) puts cumulative supply losses at more than 1.3 billion barrels.

Oil supply shocks of this scale tend to reprice markets well before pump prices respond, and the collapse in Hormuz flows from about 20 million barrels a day fits that pattern closely.

Freight costs compounded the damage. CNBC reported that shipping crude from the Persian Gulf to China reached about US$1 million per tanker per day.

That shock fed straight into the DMPR’s 5 October announcement.

The rand effect is real, but a current USD/ZAR rate could not be confirmed, so it stays qualitative here. For you, the external-shock explanation holds up for the size of the monthly jump. This increase is a global energy story first and a South African policy story second.

But “external” explains the spike. It does not explain the whole price.

How South African fuel prices are built, and where government actually sits in them

A pump price looks like one number. It is really a stack of layers, and only some of them move with events in the Gulf.

Three drivers set the price, according to the standard breakdown used by the South African Reserve Bank (SARB), banks and the Automobile Association:

• International product prices: fed in through the Basic Fuel Price (BFP), the formula that converts global fuel costs into a local import parity price. Controlled by world markets.
• The rand-dollar exchange rate: a weaker rand magnifies every global move. Controlled by currency markets, influenced by local conditions.
• Domestic levies and taxes: the general fuel levy, the Road Accident Fund (RAF) levy and the slate levy. Controlled in Pretoria.

The domestic layer is not small. Treasury lifted the general fuel levy from 1 April 2026 to R4.10/l for petrol and R3.93/l for diesel, increases of 9c/l and 8c/l that the Budget Review describes as “less than inflation”. The RAF levy also remains in place, and the 2026 Treasury documents show no sign of cuts or a levy holiday as of October. Its current amount was not confirmed in available research.

Together with the slate levy, these charges add well over R5 to every litre. You should read that stack as a fixed cost floor: even if oil falls sharply, a large part of the pump price will not.

What the slate levy does and does not do

The slate levy rose to 87.66c/l from 7 October, up 4.38c/l from 83.28c/l, adding nearly R0.88 a litre. It exists to recover earlier under-recoveries, the gaps that open when the regulated price lags actual costs.

That makes it a repayment mechanism, not consumer relief. The formula operating as designed is not extraordinary cushioning, which is why Mantashe’s claim is directionally correct without meaning government has no role.

Cushioning versus an entitlement: the fiscal argument Mantashe is making

Mantashe does not oppose relief. He backs state measures to soften increases, but insists citizens treat them as sympathetic help rather than an entitlement, warning that the alternative leads to everything becoming a right. Every rand spent on fuel, he noted, is a rand unavailable for something else.

He also said he appeals to the Finance Minister, whom he called a relatively difficult counterpart, to adjust the fuel levy and set money aside.

Treasury’s documented choices point the other way. The 2026 Budget raised the levy, albeit below inflation, and no suspension is in force. The contrast with 2022 is telling: after the Russia/Ukraine shock, government temporarily cut the general fuel levy before reversing it.

When an oil-importing economy takes an external hit, fuel taxes become a frontline policy tool, and the trade-off between softening inflation and protecting revenue is exactly what separates the two camps in this debate.

Here the rhetoric and the record pull apart. Mantashe says cushioning has occurred during this war, yet the Treasury and DMPR documents available show no large-scale relief in force. Any cushioning appears limited, and its form and scale are undocumented.

Two further gaps matter: no quantified fiscal cost of cushioning, and no October response from the Finance Minister. For you, the visible signal is fiscal caution, so treat any relief announcement as an upside surprise rather than the base case.

What record fuel costs mean for South African miners and Australian portfolios

Wholesale diesel now sits at R31.95/l (0.05%) and R33.29/l (0.005%) inland, and R31.08/l and R32.03/l at the coast. On a mine site, that price runs through haul trucks, drill rigs, blasting and on-site generation.

On a mine site, energy cost inflation compounds quickly because diesel feeds haulage, drilling and blasting at once, which is why deep-level and higher-cost operations see cash costs per tonne move first when wholesale prices jump.

The shock travels outward in a predictable sequence:

1. Brent and Hormuz disruption lift international product prices.
2. The BFP formula passes that into wholesale diesel.
3. Higher diesel raises cash costs per ounce or tonne, squeezing free cash flow, especially at higher-cost and deep-level operations already dealing with power disruptions.
4. Freight and distribution costs climb, pushing up headline CPI alongside Hormuz-driven fertiliser and input prices.
5. Sustained fuel inflation limits the SARB’s room to ease, keeping real rates higher and weighing on interest-sensitive valuations.

The 2022 precedent shows why relief is no easy fix. Levy cuts softened the inflation peak, but at a fiscal cost that is hard to repeat without undermining consolidation.

Key takeaway South Africa’s fuel levy structure currently favours revenue protection over sustained consumer or industry relief.

For Australian investors in dual-listed platinum group metal, gold and iron ore names, the headline pump price is the wrong gauge. Check each holding for diesel intensity and hedge cover, because those two factors decide how much of this shock reaches earnings.

What the price shock settles, and what it leaves open

Mantashe is right on the trigger and incomplete on the structure. The war explains the jump; the levy stack explains why prices will not fall as far as oil might. Treasury’s record suggests relief, if any, stays limited.

Three variables will decide the next move: Brent and Hormuz normalisation, the rand-dollar rate, and any Finance Minister response on the levy. Each remains partly unresolved, with no confirmed USD/ZAR figure, no costing of cushioning and no Treasury reply on record.

For your South African exposure, the practical call is to price in a high cost floor and treat relief as optional upside.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors.