What Makes Up South Africa’s Petrol and Diesel Prices?

What makes up the price at the pump?

The amount drivers pay reflects more than the cost of crude oil. It also includes taxes and levies, as well as costs linked to obtaining and supplying fuel. The sources provided do not give a full item-by-item price breakdown for each fuel grade.

For the October adjustment, the reported General Fuel Levy was R4.10 a litre for petrol and R3.93 for diesel. Petrol also faced other charges, including the Road Accident Fund levy; the reported petrol tax bill was R6.58 a litre. ¹

What changed in the October fuel adjustment?

From Wednesday, October 7, petrol 95 increased by R3.33 a litre to more than R30.25. Diesel increased by as much as R3.24 a litre, taking its price above R35. ² These are the reported figures for the adjustment, not a complete list of prices at every station or for every grade.

What pushed up the cost of fuel supplies?

The Department of Mineral and Petroleum Resources cited international oil costs, uncertainty about oil passing through the Strait of Hormuz, higher shipping costs and falling inventories. Brent crude averaged more than $101 a barrel in September, according to the report. ²

The report also described disruption to Saudi oil exports and damage to Russian refining capacity as pressures on supply. ² Together, these factors help explain why the cost of fuel rose, though the sources do not say how long they will persist.

Did a weaker rand drive the increase?

The rand's average exchange rate against the dollar was described as largely unchanged during the period reported. ² That makes a sharp change in the exchange rate a less prominent explanation for this particular increase than higher oil and shipping costs.

Oil is traded internationally in dollars, so exchange-rate movements can affect what fuel costs in rand. But the supplied reporting does not attribute the October increase to a significant average exchange-rate change. ²

Why is fuel tax relief not back?

Temporary relief between April and June reduced the General Fuel Levy by R3 a litre for petrol and, at its peak, R3.93 a litre for diesel. The relief was not reintroduced for the October increase. ¹

A lower levy could reduce the amount drivers pay, but it would also leave the government with less revenue. Economists cited by IOL said that fiscal cost needs to be weighed against the economic pressure caused by expensive fuel. ¹ The source does not establish whether relief will return.

What does this mean for drivers and households?

Drivers pay more directly when filling up. Higher fuel costs can also put pressure on transport and other costs, though the sources do not quantify the effect on particular households or goods. The reporting raised concerns that the increases could add to inflation and weigh on an already sluggish domestic economy. ¹²

The extent of any wider effects, and how long they might last, remain uncertain. The available information explains the October adjustment but does not provide a forecast for future pump prices.