The ever-fluctuating petrol price has put motorists in a spin, here is how the price is worked out.
Petrol 95 increased by 88 cents per litre, and the two diesel fuels by 95 cents per litre on 6 April.
The 30c/l increase to the fuel levy, announced by Finance Minister Pravin Gordhan during his budget speech in February, has been added to all the price adjustments.
This additional 30 cents per litre has moved the fuel levy – a tax collected on every litre of fuel sold – from R2.55 to R2.85 a litre. The money collected through the fuel levy is administered by the National Treasury, and is treated as a general tax, not, as many people assume, only for road-related expenses.
In South Africa this price is adjusted monthly based on a number of factors, mainly international petroleum prices, and the Rand versus US Dollar exchange rate.
The Basic Fuel Price (BFP) is calculated based on costs associated with shipping petroleum products to South Africa from the Mediterranean area, Arab Gulf, and Singapore. These costs include insurance, storage, and wharfage (a charge assessed by a shipping terminal or port when goods are moved through the location), the cost to use harbour facilities when off-loading petroleum products into storage facilities.
Other costs associated with the petrol price include transport costs (from the harbour to other areas), customs and excise duties, the retail margins paid to fuel station owners, and secondary storage costs. Importantly, these other costs also include the Fuel Levy, and the Road Accident Fund (RAF) Levy.
Currently these other costs total R7.06 for inland users, and R6.73 for coastal users, per litre of 93 unleaded petrol. Of this, a revised figure of R2.85 is allocated to the Fuel Levy, and R1.54 to RAF Levy.
The Fuel Levy goes directly to the National Treasury, while the RAF Levy goes to the RAF, and is used to care for victims of car crashes.
This means that for every inland litre of petrol costing R12.32, R4.39 (35 per cent) is allocated to different government levies. For every litre of coastal petrol costing R11.94, close to 37 per cent is allocated to the levies.
Inland
Using this formula, filling a 50 l tank with 93 unleaded petrol inland, will cost R616.00. Of this, R142.50 goes directly to the Fuel Levy with a further R77 going to the RAF Levy, giving a combined total of R219.50.
Take a look at the infographic from the AA:
Coastal
Using this formula, filling a 50 l tank with 93 unleaded petrol at the coast, will cost R597.00. Of this, R142.50 goes directly to the Fuel Levy with a further R77 going to the RAF Levy, giving a combined total of R219.50.
Take a look at the infographic from the AA:
