How SA's fuel price is calculated

<b> EBBS AND FLOWS:</b> Determining the local fuel price is subjected to a number of factors: including international petroleum prices, and the Rand/US Dollar exchange rate. <i>Image: iStock</i>
<b> EBBS AND FLOWS:</b> Determining the local fuel price is subjected to a number of factors: including international petroleum prices, and the Rand/US Dollar exchange rate. <i>Image: iStock</i>

Cape Town - 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/US Dollar exchange rate.

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.

In March 2016 these costs totalled R4.70 per litre for 93 unleaded petrol (inland)

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)

How much will SA motorists have to pay?

In March 2016, these other costs totalled R6.76 (for inland users) per litre for 93 unleaded petrol. Of this, R2.55 was allocated to the Fuel Levy, and R1.54 was allocated to the RAF Levy.

The Fuel Levy goes directly to the National Treasury, while the RAF Levy goes to the RAF, and is used to care for victims of car crashes.

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This means that for every litre of petrol costing R11.46, R4.09 (or almost 35%) is allocated to different government levies. In April this will increase to R4.39 per litre.

Using this formula, filling a 50 l tank with 93 unleaded petrol inland, will cost you R573. Of this, R127.50 goes directly to the Fuel Levy with a further R77 going to the RAF Levy, giving a combined total of R204.50.

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