What a litre of petrol would cost in South Africa without government’s steep taxes

Absa has released a new report focusing on the factors fueling South Africa’s petrol prices hikes.

South Africa faced its fifth consecutive hike in August, with analysts warning that further hikes could last all the way until 2019.

According to the South African Petroleum Industry Association, the government regulates the price of petrol. The prices are recalibrated on the first Wednesday of every month by the Central Energy Fund (CEF) on behalf of the Department of Energy (DOE).

Absa notes that there are several factors at play in determining this price, including:

  • International and external factors – The Basic Fuel Price (BFP) is essentially what it costs an importer to buy petrol from a refinery and bring it all the way to South Africa. However, the dollar/rand exchange rate can sometimes create an unexpected spike in the import costs.
  • Local factors internal factors – Local factors include the cost of shipping and other direct costs such as transportation, service, taxes and levies, wholesale and retail margins. Unlike petrol, diesel prices are not regulated. However, petrol importers try to keep the margins on diesel similar to petrol.

 The pie chart below shows you exactly how the price of petrol is divvied up following the latest budget:

How much do fuel levies contribute to the overall picture?

In the 2018/19 national budget, Treasury penciled R77.5 billion in revenues from fuel levies alone.

The fuel levy contributes close to 6% to the gross tax revenues of the country.

The 52 c/litre increase this year, which was a combination of the 22 c/litre increase in the general fuel levy and 30 c/litre in the Road Accident Fund levy, took the total fuel tax from R4.82 to R5.34.

Without these taxes you would be paying R10.69 for a litre of 95 petrol, while a litre of 93 petrol would cost R10.47.

Fuel August official August official (without taxes)
95 Petrol R16.03 R10.69
93 Petrol R15.81 R10.47
0.05% Diesel (wholesale) R14.41 R9.07

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