Here is how much fuel costs in SA before taxes are added

South Africa’s fuel price has been a contentious topic over the years, continually rising against a strengthening dollar. Despite this, increasing taxes on the base price has further burdened the cash-strapped public. Here is exactly how much fuel costs before it can be sold locally. taxes

In May 2022, a litre of ULP93 inland cost R21,51 while the same fuel costs R23,01/l in May 2023. A litre of ULP95 at the coast cost R21,09 in May 2022 while a year later costs R22,62/l. This all correlates with the fluctuating rand/US dollar exchange rate (the currency with which fuel is purchased), and international petroleum prices (the cost of refined fuel). Logically, a weaker rand will result in more outlay to motorists at the pumps while international petroleum prices can rise and lower depending on global supply and demand, further effecting the bottom line for consumers.

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As with many countries, South Africa’s fuel price is comprised of many different elements, some of which make fuel in the country more expensive than in neighbouring countries to which South Africa exports. To understand the different elements which comprise a litre of petrol locally, the Automobile Association (AA) publishes a fuel price breakdown to give consumers a snapshot of the composition of a litre of petrol inland and at the coast.

The figures are based on 93 Octane fuel (inland) and 95 Octane (coastal).

The costs are calculated using May fuel price data which incorporates the two main taxes paid on every litre of fuel namely the General Fuel Levy (GFL) and the Road Accident Fund (RAF) levy. Increases to these levies are usually announced in February during the Finance Minister’s annual Budget speech and come into effect in April. In 2023, no increases to these levies were affected, but they remain significant contributors to the overall prices of fuel.

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In May 2023, the total cost of the two main levies stands at R6,14 (R3,96 for the GFL and R2,18 for the RAF levy), which is levied on every litre of petrol sold in the country. The GFL is lower for diesel at R3,82 while the RAF levy remains the same.taxes

Increases to fuel prices also mean an increase to goods which are transported across the country as operators recover these higher input costs through increases which are passed on to consumers.

The AA reiterates its position of mid-April 2021, when it made representations to the Parliamentary Portfolio Committee on Mineral Resources and Energy, that several steps can be taken to mitigate rising fuel costs in the country. Among these are a recalculation and audit of the existing elements within the fuel pricing model and a reduction of the costs of the Road Accident Fund (RAF) to motorists through:

  1. Better management and governance of the RAF
  2. Improved road safety to reduce demand on the RAF
  3. Better traffic policing
  4. Safer Roads/Safer Drivers/Safer Cars/Better Post-Crash Intervention
  5. Better pedestrian safety education
  6. Privatisation of the RAF, or at minimum, semi-privatisation of claims management

The Association further notes that the misappropriation of funds and corruption are siphoning money away from the GFL which could be used better if allocated properly and accounted for. Investments in alternative forms of public transport, and investments in improving Transnet, are vital.

Fuel Price Breakdown with taxes – May 2023

The fuel price in South Africa is comprised of four main elements:

  • The GFL
  • RAF Levy
  • Basic Fuel Price (freight and insurance costs, cargo dues, storage, and financing)
  • Wholesale and retail margins, and distribution and transport costs

As of May 2023, the GFL is R3,96 which represents around 17% of every litre of petrol sold in South Africa. The RAF levy priced at R2,18 a litre represents around 11% on every litre of fuel sold. Combined, the two main levies will deliver around R138bn in revenue to government, approximately R90bn going to the GFL with the rest going to the RAF. The GFL contribution goes directly to Treasury and can be used for any purpose government determines.

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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. These costs include insurance, storage, and wharfage (the cost to harbour facilities when off-loading petroleum products into storage). The current BFP is around R12,63 (ULP93 inland).

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Other costs associated with the petrol price include transport costs (from the harbour to inland areas, which accounts for the difference in price between coastal and inland prices), custom and excise duties, retail margins paid to fuel station owners (currently R2,42 on every litre sold), and secondary storage costs. These costs currently total R4,24/l for inland petrol, and R3,52/l for coastal petrol.

Using the current data, filling a 50-litre tank of fuel inland (93ULP) will cost R1 150,50 inland, and R1 131,00 (95ULP) at the coast – R76,50 more now than a year ago.

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