Big changes coming for petrol stations in South Africa
Fuel station operators in South Africa face an uncertain future as the world transitions to electric vehicles—but opportunities can be found.
Karen Keylock, National Retail Services Manager at Nedbank Commercial Banking, said there is a global shift towards cleaner fuels and new energy vehicles (NEVs).
Although the electric vehicle network in South Africa remains extremely limited for now, organisations and businesses are working to change that.
Automotive business council NAAMSA and the private sector are building a national charging network of 120 sites, providing accessible, reliable charging along key routes throughout the country.
However, this will significantly change the way the current ‘generation’ of fuel stations works.
This is because the charging network will leverage existing fuel stations instead of building new sites, helping ensure drivers can find charging sites within an easy travelling distance.
These chargers will also be public and free to access, without hidden costs.
Keylock said fuel stations are preferable because of their proximity to existing vehicle-refuelling and alternate revenue stream infrastructure.
To reduce the cost of the NEV charging infrastructure build and increase the speed of installation, the sites will primarily operate off the national electricity grid, supported by renewable energy.
“Fuel stations are, in fact, ideally suited for solar PV installations because they have sizable areas of roof space over their buildings and forecourts, which are generally located in full sun,” said Keylock.
“So, as increased income streams generated by the new infrastructure boost profits, fuel station owners can increase the renewable energy component of their sites to decrease their reliance on the national grid and thus boost profitability further.”
She added that a shift from fossil fuels to electricity marks a natural evolution for forecourts, which have already undergone massive changes over the last 50 years.
Fuel forecourts have offered restaurants, convenience stores, car workshops, tyre fitment centres, and even hotels since the 1960s.
Fuel stations have always been essential to a midway destination on long journeys for family holidays.
As recharging an NEV takes significantly more time than filling up the fuel tank, pharmacies, laundry services, gyms, and co-working spaces may become more popular.
This evolution is crucial as operators will have less income from fuel.
Just 20% of the forecourt’s revenue is expected to come from fuel, compared with the 90% it has historically contributed.
Affordability issues remain
Although these vehicles still represent a small share of South Africa’s vehicle market at less than 3%, rapid international developments and consumer demand will likely push this number upwards.
The South African NEV market is small but growing, dominated by traditional hybrids like the Toyota Corolla Cross and Mercedes-Benz C-Class.
Full battery electric vehicle (BEV) sales remain limited due to affordability, the most significant barrier to growth in this market.
Most cars are priced over R900,000, yet 74% of new car sales in South Africa are under R500,000.
A BusinessTech comparison highlighted this price discrepancy. For instance, the electric Mini Countryman SE costs over R1 million, while its ICE counterparts start from just over R700,000.
The cost of upgrading from an ICE car to a hybrid one is cheaper, with the increase in price for the newly launched Chery Tiggo Cross R40,000 more expensive.
South Africa is reducing EV import duties, which could lead to greater uptake. Currently, the initial outlay for many South Africans on an EV is too high.
Outside of the initial outlay, EVs can offer reduced costs, as maintenance and service costs are often far cheaper.
EV batteries typically last eight to 10 years, and even longer with proper care. Battery replacement costs are around R100,000, but should decrease with further technological advancements.
Moreover, charging is far cheaper than using fuel, with the per kilometer use of electrical energy being far lower compared to petrol.
Home charging can lower the cost even further, especially when using off-peak tariffs. The price can drop to nearly zero for those who use solar energy.
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