The series of welcome drops in the petrol price came to an end in April with the 88 cents per litre price rise.

Contributing to this price increase was the 30 cents hike in the fuel levy that was announced by Finance Minister Pravin Gordhan in the February budget. Pipeline and road transportation tariff increases, approved by the National Energy Regulator, also added to the price increase.

Although crude oil is trading at record lows, it is interesting to note that the price of oil does not play a direct role in the calculation of the petrol price. The dollar prices of refined petrol and diesel at international refineries are used to determine the basic fuel price.

In South Africa, the price of petrol is adjusted monthly according to factors like international petroleum prices and the Rand/US dollar exchange rate.

The petrol price that we pay at the pump is up of many different costs:

1. The Basic Fuel Price (BFP) comprising the actual cost of the fuel, plus all costs related to shipping it to South Africa (like freight, wharfage, insurance, customs and excise duties etc)

2. Other associated costs
o Transport and distribution costs
o Wholesale and retail margins
o Storage costs

3. Taxes
o Fuel Levy
o Road Accident Fund (RAF) Levy

Approximately 35% of the price we pay at the pump is for government levies and taxes. The Fuel Levy is a general tax which goes directly to the National Treasury, while the Road Accident Fund Levy is used to assist accident victims.

Data from shows how South Africa’s petrol price compares globally. Currently, South Africa’s petrol price of $0.87 per litre is similar to that of Australia ($0.88) and is significantly cheaper than U.K. ($1.51). Hong Kong has the most expensive petrol in the world ($1.81) while petrol in Kuwait costs just $0.22 per litre.