Abstract
This article reviews the regulation of liquid fuels in South Africa over the past decade. We first briefly assess the regulatory regime and how the regulatory functions have been carried out. We then consider the influence of security of supply concerns on regulation and highlight that it has favoured local refining interests rather simply ensuring supply to local fuel customers. The record of price regulation at different levels from refinery to retail is assessed, revealing the margins which had been allowed through the way in which the import parity price calculation had been done, which set prices that were higher than actual import prices would have been. The article further highlights how regulation has failed to take into account the special position of Sasol, notwithstanding the recommendations of the Windfall Tax Task Team and the reasons why the recommendations were not adopted by National Treasury based on expectations of investment. The case of natural gas provides a contrast, being subject to a recent regulatory framework, and we consider whether learnings from regulation in other parts of the value chain have been used in setting out new regulations.