Energy

Infographic: Why you are taxed R239 every time you fill up at a petrol station

Staff Writer

 ·5 Apr 2017

From today (Wednesday, 5 April) South African motorists will pay 24 cents less per litre of petrol, and 11 cents less for diesel.

These decreases come despite a 30 cents increase in the fuel levy and a 9 cents increase in the Road Accident Fund levy, which came into effect from 1 April.

The General Fuel Levy is a tax charged for every litre of petrol sold, notes the Automobile Association (AA). In April last year, this tax increased by 30 cents from R2.55 to R2,85.

For the second year in a row, this tax is increasing, again by another 30 cents, and will now stand at R3.15.

This money is administered by the National Treasury, and is treated as a general tax and not, as many people assume, for road-related expenses, the AA said.

Money collected through the RAF levy portion of every litre of petrol sold is used to fund the Road Accident Fund, which uses the money to compensate victims of road accidents in South Africa. This levy will increase to R1.63 on Wednesday evening.

So, if a litre of petrol (inland) costs R13.08, then R4.78, or 35%, of the total cost of that litre goes towards direct or indirect taxes.

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

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

The current BFP is R5.36, the AA said.

Other costs associated with the petrol price include transport costs (from the harbour to inland areas), customs and excise duties, retail margins paid to fuel station owners, and secondary storage costs.

These costs currently total R2.94 for inland petrol, and R2.55 for coastal petrol.

Using this data, filling a 50 litre tank with 93 unleaded petrol inland will cost R654. This is comprised of the Fuel Levy – R3.15 x 50 l (R157.50), RAF levy – R1.63 x 50 l (R81.50), associated costs – R2.94 x 50 l (R147), and the Basic Fuel Price – R5.36 x 50 l (R268).

Read: How much it costs to open a petrol station franchise in South Africa