Petrol users across South Africa are paying around R1.50 a litre more for fuel in May 2023 than at the same time last year. The increases to 93ULP inland and 95ULP at the coast represent increases of around 7% to petrol over a year period. The wholesale price of diesel over the same period decreased from R21.99/l in May 2022 to R20.15 in May 2023 inland, and from R21.34/l in May 2022 to R19.43/l in May 2023 at coastal rates.
As we indicated in our petrol prices forecast for June 2023, from Wednesday, 93 and 95 Unleaded petrol is set to decrease by 71c, respectively, while users of 0.05% and 0.005% diesel will see a significant slash ranging between 84c and 80c per litre for 0.05% and 0.005% sulphur.
In a statement, the Department of Energy confirmed adjustments in fuel prices for this month were due to:
- the drop in international product prices for petrol, diesel and paraffin;
- the rand depreciating, on average, against the US dollar;
- the average rand/dollar exchange rate totalling R18.98 during the period 26 April to 1 June 2023;
- the removal of the 1 c/l fuel levy charge applied to petrol prices in May 2023 as a measure of recouping the levy payment for April 2023; and
What goes into the final retail price of fuel in South Africa
Determining the final retail price of petrol in South Africa relies heavily on the rand’s performance in currency markets and oil price movements. Using this information, the CEF can formulate basic fuel price (BFP) estimates which, in essence, offer South African importers a snapshot into the cost of buying petrol from an international refinery, transporting the product and ensuring it against possible losses at sea and on land.
However, before the retail price of petrol is finalised at petrol stations, several additional costs are included in the BFP:
- IP tracer levy (reimbursement to the oil industry for buying IP tracer dye and injecting it into IP to curtail the mixing of IP and diesel)
- General Fuel levy (tax levied by the government)
- Slate levy (to finance the cumulative under-recovery of the industry)
- RAF levy (to compensate for people involved in road crashes and accidents)
- Petroleum products levy (reimbursement to the pipeline users for the applicable NERSA tariff on transporting fuel through the pipeline)
- Wholesale margin (markup to the price of a product to account for wholesaling costs)
- Service cost recoveries
- Storage, handling and delivery costs
- Distribution costs
- Dealers margin (commission to the fuel pump dealers for retail operation)
- Zone differential (applicable to inland regions)
- Customs and excise duty
Petrol price adjustments are generally made on the first Wednesday of every month by the Department of Energy.