The wildly-fluctuating fuel price is a massive discussion point and we've often wondered how the numbers work. The AA has published a breakdown of the fuel price to show SA consumers where their money is going.
The past few months have been extremely volatile for the petrol price. Covid-19 combined with the oil price war as well as an unstable exchange rate has resulted in some wild decreases. Sadly, we think that's the last of them as things are slowly reverting back to normal. These decreases, however, refer to the basic price of fuel as the taxes do not change.
Let's look at these taxes that go into every litre of fuel. First up is the General Fuel Levy (GFL) which is R3.77 (31%) of every litre of inland fuel and 32% of every litre of coastal fuel.
The second tax is the Road Accident Fund Levy (RAF) and its R2.07 per litre which is around 17% per litre of fuel sold. The AA is keen to point out these taxes hurt the poor the most as an increase to them always results in an increase in the cost of public transport.
Together, both the RAF and GLF add up to R5.84. This is around 49% of the price of every litre of fuel sold in South Africa. It's estimated that the government will get about R135 billion from these levies, with R87 billion going directly to Treasury.
The third factor in the SA fuel price is the actual cost of petrol itself, plus the add-ons like insurance, transport, harbour fees and so on. It's referred to as the BFP and right now it's in a good place at R2.64, way lower now at the time of writing (25 May 2020) than when the Lockdown started.
Finally, the last factors are the transport costs of getting the petrol from the harbour to inland areas (which explains the differences in coastal and inland price), as well as customs/excise duties as well as a retail margins paid to fuel station owners.
Right now, the petrol station owners get R2.11 for every litre sold. The cost of secondary storage also has to be considered and in total, that's R3.54 for inland petrol and R3.02 for coastal petrol.
It's never been a better time for the SA motorist as the last time we had petrol this low, it was 2016. Unfortunately, the cost of petrol is slowly going to increase as economic activity starts to pick up.