Petrol users across South Africa are paying about R1.50 a litre more for fuel in May than at the same time last year.
The increases to 93ULP inland and 95ULP at the coast represent increases of about 7% to petrol over a year.
The wholesale price of diesel decreased inland from R21.99/l in May 2022 to R20.15/l in May 2023 and from R21.34/l to R19.43/l at the coast.
The diesel price decrease must, however, be seen against the backdrop of significant price increases between June and December 2022 when the price of a litre of diesel inland reached R25.40/l in July 2022.
Petrol prices during this period (June—December 2022) remained high with ULP95 (inland) reaching R26.74/l in July and ULP95 at the coast reaching R26.09/l.
In May 2022, a litre of ULP93 inland cost R21.51 compared with R23.01/l in May 2023, while a litre of ULP95 at the coast cost R21.09 compared with R22.62/l now.
South Africa’s fuel price comprises many different elements, some of which make fuel 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 for consumers.
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 announced, but they remain significant contributors to the overall prices of fuel.
In May 2023, the two main levies amount to R6.14 (R3.96 for the GFL and R2.18 for the RAF levy), which are 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.
Increases to fuel prices also mean an increase in the price of goods transported across the country as operators recover these higher input costs through increases which are passed on to consumers.
The AA has reiterated its position stated in its mid-April 2021 representation to the parliamentary portfolio committee on mineral resources and energy that several steps can be taken to mitigate rising fuel costs. Among these are a recalculation and audit of the existing elements within the fuel pricing model and a reduction of the costs of the RAF to motorists through:
- Better management and governance of the RAF
- Improved road safety to reduce demand on the RAF
- Better traffic policing
- Safer roads, drivers and cars and better post-crash intervention
- Better pedestrian safety education
- Privatisation of the RAF, or at minimum, semi-privatisation of claims management
The association said 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 to improve Transnet are vital.
Fuel price breakdown May 2023
The fuel price is comprises 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
For May the GFL is R3.96 which represents about 17% of every litre of petrol sold in South Africa. The RAF levy priced at R2.18 a litre represents about 11% on every litre of fuel sold.
According to the AA, the two main levies combined will deliver around R138bn in revenue to the government's coffers, about 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 the government determines.
In South Africa, the fuel price is adjusted on the first Wednesday of every month and is determined by two main factors: The rand/US dollar exchange rate (how fuel is purchased), and international petroleum prices (how much the fuel costs to purchase).
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 offloading petroleum products into storage).
The current BFP is around R12.63 (ULP93 inland).
Other costs associated with the petrol price include transport (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 R1,130/l (95ULP) at the coast — R76.50 more than a year ago.
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Breaking down the high price of fuel in South Africa
Image: Freddy Mavunda
Petrol users across South Africa are paying about R1.50 a litre more for fuel in May than at the same time last year.
The increases to 93ULP inland and 95ULP at the coast represent increases of about 7% to petrol over a year.
The wholesale price of diesel decreased inland from R21.99/l in May 2022 to R20.15/l in May 2023 and from R21.34/l to R19.43/l at the coast.
The diesel price decrease must, however, be seen against the backdrop of significant price increases between June and December 2022 when the price of a litre of diesel inland reached R25.40/l in July 2022.
Petrol prices during this period (June—December 2022) remained high with ULP95 (inland) reaching R26.74/l in July and ULP95 at the coast reaching R26.09/l.
In May 2022, a litre of ULP93 inland cost R21.51 compared with R23.01/l in May 2023, while a litre of ULP95 at the coast cost R21.09 compared with R22.62/l now.
South Africa’s fuel price comprises many different elements, some of which make fuel 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 for consumers.
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 announced, but they remain significant contributors to the overall prices of fuel.
In May 2023, the two main levies amount to R6.14 (R3.96 for the GFL and R2.18 for the RAF levy), which are 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.
Increases to fuel prices also mean an increase in the price of goods transported across the country as operators recover these higher input costs through increases which are passed on to consumers.
The AA has reiterated its position stated in its mid-April 2021 representation to the parliamentary portfolio committee on mineral resources and energy that several steps can be taken to mitigate rising fuel costs. Among these are a recalculation and audit of the existing elements within the fuel pricing model and a reduction of the costs of the RAF to motorists through:
The association said 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 to improve Transnet are vital.
Fuel price breakdown May 2023
The fuel price is comprises four main elements:
For May the GFL is R3.96 which represents about 17% of every litre of petrol sold in South Africa. The RAF levy priced at R2.18 a litre represents about 11% on every litre of fuel sold.
According to the AA, the two main levies combined will deliver around R138bn in revenue to the government's coffers, about 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 the government determines.
In South Africa, the fuel price is adjusted on the first Wednesday of every month and is determined by two main factors: The rand/US dollar exchange rate (how fuel is purchased), and international petroleum prices (how much the fuel costs to purchase).
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 offloading petroleum products into storage).
The current BFP is around R12.63 (ULP93 inland).
Other costs associated with the petrol price include transport (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 R1,130/l (95ULP) at the coast — R76.50 more than a year ago.
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