How SA’s fuel price works

2016-04-07 06:00
PHOTO: sourced The petrol price has risen, once again.

PHOTO: sourced The petrol price has risen, once again.

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FOR many motorists, the fuel price is merely a figure on a pump at a fuel station. According to the Automobile Association: “The cost of this essential commodity is made up of many different costs that, together, constitute what is commonly referred to as the petrol price.”

In South Africa this price is adjusted monthly based on a number of factors, mainly international petroleum prices, and the rand-dollar exchange rate.

As of Wednesday, Ninety-three octane went up by 86 cents per litre, and 95 octane by 88 cents per litre.

The price of diesel increased by between 95.7 cents and 97.7 cents a litre‚ while paraffin will cost 76 cents a litre more, and liquid petroleum gas costs 10 cents more per kilogram.

The Energy Department said the strengthening of the Rand against the US dollar during the review period had cushioned the fuel price increases by close to 10 cents a litre.

With the fuel levy now at R2.85, the projected revenue from the tax for 2016/17 is expected to be R54 billion, the AA said – up 11.6% from R48.4 billion before.

How it works

The Basic Fuel Price (BFP) is calculated based on costs associated with shipping petroleum products to South Africa from the Mediterranean area, Arab Gulf, and Singapore, reports the AA. These costs include insurance, storage, and wharfage, the cost to use harbour facilities when off-loading petroleum products into storage facilities.

Other costs affecting the SA fuel price include:

• Transport costs (from the harbour to other areas)

• Customs and excise duties

• Retail margins paid to fuel station owners

• Secondary storage costs

• Fuel levy

• Road Accident Fund (RAF)

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