The Automobile Association has published its annual fuel-price breakdown to give South African motorists a "snapshot" of the cost composition of every litre of petrol sold.

The organisation considers the cost of petrol both at the coast and inland.

South Africa’s fuel price comprises “many different elements”, says the AA, some of which make fuel here “more expensive than that in neighbouring countries to which South Africa exports”.

The figures used are based on 93-octane petrol (inland) and 95-octane petrol (coastal). The AA says it should be noted “the dramatic drop” in fuel prices in April and May 2020 were “record decreases”, and would “unlikely be seen soon again, if ever”.

“While these figures bring the overall basic fuel price down, the data relating to the taxes does not change monthly, and remains constant from April to April,” the Association said.

So, to the figures. The AA says the two main taxes paid on every litre of fuel are the general fuel levy (GFL) and the road accident fund (RAF) levy. The fuel price in South Africa thus comprises four main elements: the aforementioned two taxes, the basic fuel price, and wholesale and retail margins, including distribution and transport costs.

Currently, the GFL is R3,77, which represents 31 percent of a litre of fuel inland (calculated against the current cost of R12,02 per litre) and 32 percent of a litre of fuel at the coast (calculated against the current cost of R11,52 per litre). Similarly, at its current rate of R2,07 a litre, the RAF levy represents between 17 and 18 percent on every litre of petrol sold.

Combined, the levies total R5,84, which is the same for inland and coastal prices. Collectively, at the current prices, the AA says these levies comprise a whopping 48 to 50 percent of every litre of petrol sold in the country. The organisation says the government is “projected to gather a total of around R135-billion from these levies, with around R87-billion coming from the GFL and R48-billion coming from the RAF levy".

In South Africa, the rest of the fuel price is determined by two main factors: the rand/dollar exchange rate (how fuel is purchased, as the AA puts it) and international petroleum prices (how much the fuel costs to purchase).

The AA says the basic fuel price is calculated based on costs associated with shipping petroleum products to South Africa from the Mediterranean area, the Arab Gulf and Singapore. These costs include insurance, storage, and wharfage.

Other costs associated with the petrol price include transport (from the harbour to inland areas, which accounts for the difference in price between coastal and inland prices), custom and excise duties, retail margins paid to fuel station owners (currently R2,11 on every litre sold, says the AA) and secondary storage costs. These costs currently total R3,54 for inland petrol and R3,02 for coastal petrol.

Check out the two infographics below for a visual representation...


Original article from Car