Fuel price calculation: who takes what?

IOL mot jul16 fuel . File picture: Shutterstock

So how exactly is the fuel price calculated? Who takes what cut?

It's a contentious topic with South Africans, given how much we pay for fuel these days, and one fraught with misconceptions.

Did you know that a litre of 93 unleaded petrol actually costs a mere R4.70 to import into South Africa? That includes the actual cost of the fuel as well as shipping it here, taking out the necessary transportation insurance and paying the harbour fees etc...

Yet by the time it flows into your car's tank, that litre of black gold has risen to R11.46 (inland). According to the Automobile Association, which crunched the numbers and created the handy infographic below, the remaining R6.76 is split between transport, retail and taxes.

Let's get the bit that you don't like out the way first.

For every litre that goes into your tank, R4.09 goes to the government. The biggest chunk of this (R2.55) is the Fuel Levy, which is a general tax that goes to National Treasury and not a road-funding scheme that many assume it is when they're cursing e-tolls. Not that a road-funding scheme of some sort would be a bad idea, but that's a topic for another day.

The Fuel Levy is set to increase by 30 cents to R2.85 c/l from the beginning of April, meaning that if the rand and oil prices don't conspire in our favour, the fuel price is almost certain to rise next month.

The remaining R1.45 finds itself in the Road Accident Fund (RAF), which pays financial compensation to the victims of road accidents.

So far that takes us to R8.79, leaving us with the remaining R2.67 that it takes to transport the fuel, and give the wholesale and retail parties their necessary slice of the action.

The effect of all these add-ons becomes painfully clear when you consider the cost of a full tank these days.

Let's assume you have a smallish car with a 50 litre tank. Filling it up will set you back R573, of which R127.50 goes to the Fuel Levy and R77 to the RAF Levy. On top of that, the new Fuel Levy will add R15 to that tank at the beginning of April, according to the AA.

 



sign up