Fuel price: Filling-up in 2023 now more expensive than 2022

The Automobile Association (AA) has renewed its call for a rethink of the fuel price structure with specific emphasis on the various levies.

Its announcement comes on the back of the Central Energy Fund predicting a considerable decrease of over R1 a litre for all fuel types in June, the association says that since May last year, motorists have had to fork out R1.50 a litre more for fuel regardless of it being petrol or diesel.

May 2023 versus 2022

In the statement, it however added that the cost of all grades had dropped significantly since June to December last year, when petrol reached R26.74 a litre inland and R26.09 at the coast, and diesel R25.04 -both having occurred in July.

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At present, motorists are forking out between R22.61 and R23.01 for a litre of fuel and as much as R21.34 for a litre of diesel, whereas 12 months ago, a litre of unleaded cost between R21.09 to R21.51 and diesel between R19.43 to R20.15 a litre.

In practise, the AA states, filling a car with a 50-litre tank up with 93 unleaded inland will cost, at current prices, R1 150 and R1 130 for a full tank of 95 unleaded at the coast. Despite the R20 price difference, compared to May 2022, it now costs R76.50 to more to fill up fully.

Structure

“The fuel price in South Africa is comprised of four main elements; the General Fuel Levy (GFL), the Road Accident Levy, the basic price related to freight and insurance costs, cargo dues, storage, and financing, and the wholesale and retail margins that include distribution and transport costs.

“As of May 2023, the GFL is R3.96 which represents around 17 percent of every litre of petrol sold in South Africa. The RAF levy priced at R2.18 a litre represents around 11 percent on every litre of fuel sold,” the AA’s statement said.

“Combined, the two main levies will deliver around R138-billion in revenue to government, approximately R90-billion going to the GFL with the rest going to the RAF. The GFL contribution goes directly to Treasury and can be used for any purpose government determines.”

It further revealed that despite none of the relative levies having spiked during the year, the differences in the basic fuel price based on the Rand’s value against the US Dollar plus international oil prices, has been partially to blame for the increases

As of May this year, the GFL and Road Accident Fund levy on diesel totals R3.82 and a combined R6.14 on 93 and 95 unleaded.

What must change

Despite the looming decrease, the AA remarks that its stance on the fuel price calculation made in April two years ago, is unchanged and several steps needs to be taken to avoid putting ongoing strain on already cash-strapped motorists.

“Among these are a recalculation and audit of the existing elements within the fuel pricing model and a reduction of the costs of the Road Accident Fund (RAF) to motorists through, better management and governance of the RAF, improved road safety to reduce demand on the RAF, better traffic policing, safer roads, drivers, cars and improved crash intervention, better pedestrian safety education and privatisation or semi- privatisation of the RAF,” it concluded.

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