Motorists are paying more for petrol at the pumps in June, as a local and global easing of lockdown restrictions spurs demand for oil and petroleum products.
Both grades of petrol have increased by R1.18 litre from Wednesday (3 June), while diesel prices have climbed by 22 cents per litre.
This takes the per litre pump price to R13.40 and R13.20 for petrol 95 and 03, respectively, while the wholesale price of diesel moves to R11.30 per litre.
The increase for June in sizeable, but not unexpected, with the Automobile Association noting that a jump in price was anticipated in line with most of the world returning to more typical economic activity.
This has an effect on oil demand, which subsequently translates to movement in global petroleum costs.
“The global lockdowns under Covid-19 saw fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero,” the AA said.
The association noted that crude oil prices used to calculate South Africa’s fuel prices had fallen in lockstep with the reduction in demand, but are now inching up as economic activity begins to ramp up on a global scale.
However, even with the price hike coming into effect, petrol prices in South Africa are still significantly lower than they were before lockdown: 16% lower for petrol and 22% lower for diesel.
Compared to the start of the year, prices are 17% and 23% lower, and year-on-year the declines are even larger at 20% and 26% lower, respectively
In rand terms, petrol prices are still R2.63 per litre cheaper than before the lockdown (R3.27 per litre for diesel).
This is also notable as there was a 25 cents per litre increase in fuel prices in April due to an increase in taxes.
The cost of taxes
A significant portion of the total fuel cost is attributable to taxes.
When prices hit their year-to-date low in May 2020, taxes accounted for approximately half of the total per litre price.
The fuel price in South Africa is comprised of four main elements:
- The General Fuel Levy (GFL);
- Raod Accident Fund (RAF) Levy ;
- Basic Fuel Price (freight and insurance costs, cargo dues, storage and financing);
- Wholesale and retail margins, and distribution and transport costs.
Combined the GFL and RAF levies total R5.84 – which remains the same for both inland and coastal prices – which in May 2020 comprised 48% – 50% of every litre of petrol sold in the country.
From tomorrow (3 June), these levies will carry slightly lower weighting at 44%.
Using the current data, filling a 50 litre tank of fuel inland will cost R670 (inland, petrol 95). This means that you will effectively pay R292 every time you fill up in South Africa.
Here are how fuel prices have changed:
|Fuel (Inland)||May Official||June Official|
|0.05% Diesel (wholesale)||R11.08||R11.30|
|0.005% Diesel (wholesale)||R11.17||R11.38|