R12 per litre alternative to high petrol prices in South Africa

 ·30 Jun 2024

South African motorists have been paying over R20 per litre of fuel for well over two years now, but cheaper alternatives, such as LPG fuel, are gaining momentum.

The persistently high fuel prices are aggravated by the yearly escalation in levies imposed on fuel, intensifying the financial burden on South African drivers.

Meanwhile, these levies are contributing to a substantial increase in government revenue.

Since 2021, both the General Fuel Levy (GFL) and the Road Accident Fund (RAF) levy have experienced approximately a 5% increase, rising from 377c/l to 396.00c/l and 207.00c/l to 218.00c/l, respectively.

Over the past decade, Outa, a civil action group, has observed that the collective sum of government levies and charges has surged by more than 125%.

Fuel prices decreased slightly between May 2014 and May 2016, but gradually increased annually until May 2019. In May 2020, global fuel prices dropped significantly due to an oil price crash caused by the COVID-19 pandemic.

This relief wouldn’t last long, as fuel prices rebounded strongly in the subsequent three years and skyrocketed in South Africa.

Since January 2021, on average, petrol (95) has increased by 66% from R14.56/l to R24.25/l in June 2024, while diesel has risen by around 65% from R12.81/l to R21.15/l over the same period.

When prices are compared over the last decade, the increases extend to 79% for unleaded petrol as of May 2024, and the story is similar for diesel.

Cheaper alternative

Considering the high costs of traditional fuels in South Africa, some companies are pushing for the introduction of cheaper fuel alternatives for motorists.

An example of this is Isinkwe Energies, based in KwaZulu-Natal, which partnered with Ergon Equipment and Prins Autogas to establish the first-of-its-kind liquified petroleum gas (LPG) fuel station in South Africa last year.

However, since then, they have expanded their operations to Gauteng.

Kyle Hartley, the managing director at Isinkwe Energies, told BusinessTech there has been an increase in demand for autogas, and for good reason, considering the rapidly increasing petrol prices.

“In April, we opened our first fitment centre in Midrand, Gauteng.

“On the refuelling side, Gauteng currently has several stations offering Autogas, with two conveniently located at Sasol stations in Kempton Park and Centurion,” said Kyle Hartley, the managing director at Isinkwe Energies.

He added that Isinkwe Energies’ first dedicated Autogas station in Gauteng is planned to open in Midrand this October, followed by a second station in KZN, located in Pinetown (launch date to be confirmed).

Hartley said that LPG fuel costs around R12 to R13 per litre in Gauteng and roughly R14.15 on the coast.

This makes the alternative fuel roughly 45% cheaper than the current price of R24.25 per litre for Petrol 95 within inland areas—meaning motorists could save almost half on their fuel expenses by switching to a Prins Autogas kit.

According to Hartley, these conversion kits start at R26,000, excluding VAT, and the exact cost depends on the car’s model. The installation costs around R2,950, excluding VAT.

The kit allows a car to operate on both petrol and gas, and LPG systems are known for being eco-friendly and cost-effective compared to petrol-only cars.

Hartley previously mentioned that if the vehicle runs out of gas, it automatically switches back to petrol while driving.

He also noted that converting to LPG does not result in power loss, making it an ideal alternative for petrol cars already on the road.

The company currently offers kits for 24 vehicle brands, including South Africa’s most popular brands, such as Toyota, VW, Suzuki, and Ford, as well as premium brands like Audi, BMW, and Mercedes-Benz.

Read: R2,500 per month electricity hike proposed for South Africa

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