The basic fuel price (freight and insurance costs, cargo dues, storage and financing);
Wholesale and retail margins, and distribution and transport costs.

The general fuel levy is a tax charged on every litre of petrol sold. In April 2016 it increased from R2.55 to R2.85. Last year, this levy again increased by 30 cents from R2.85 to R3.15. This year it increased by 22 cents and now stands at R3.37 a litre.

The money collected through this tax is administered by the National Treasury, and is treated as a general tax and not, as many people assume, for road-related expenses.

Money collected through the RAF levy portion of every litre of petrol sold is used to fund the Road Accident Fund, which uses the money to compensate victims of road accidents.

In 2016, the RAF Levy was R1.54 (unchanged from 2015). In 2017 it rose by nine cents to R1.63. This year the RAF levy increase was a sizable 30c and now stands at R1.93 a litre.

Combined, the general fuel levy and the RAF levy constitute R5.30 of every litre of fuel sold in the country.

So, if a litre of fuel inland (93 unleaded octane) costs R14.23, then 37% of this amount is tax. Similarly, if a litre of fuel at the coast (95 octane) costs R13.89, then 38% is tax.

The difference between inland and coastal fuel prices is mainly due to transport costs of the fuel from depots at the coat to inland outlets.

The basic fuel price (BFP) is calculated based on costs associated with shipping petroleum products to SA from the Mediterranean area, Arab Gulf, and Singapore. These costs include insurance, storage, and wharfage. The current BFP is R5.81.

Other costs

Other costs associated with the petrol price include transport costs (from the harbour to inland areas), customs and excise duties, retail margins paid to fuel station owners, and secondary storage costs. These costs currently total R3.12 for inland petrol, and R2.78 for coastal petrol.

Movements in these costs the past 12 months include an additional 10c a litre charge in transport for fuel from coastal areas to Gauteng, and an 11c a litre increase in the retail margin at both inland and coastal stations.

Using this data, filling a 50 litre tank with 93 unleaded petrol inland will cost R711,50. This is comprised of the fuel levy of R3.37 x 50l (R168.50); RAF levy of R1.93 x 50l (R96.50); associated costs of R3.12 x 50l (R156); and the basic fuel price of R5.81 x 50l (R290.50).

At the beginning of April road users across the country paid between 69 cents and 72c more for a litre of fuel at the pumps. According to the AA, this massive increase was due to a number factors, namely strengthening international petroleum prices and the addition of 52c to the fuel levies.

These fuel levies are mainly in the form of two indirect taxes: the general fuel levy, and the Road Accident Fund (RAF) levy. The increases to these levies were announced in Budget 2018 in February, but only came into effect at the beginning of the month.

At the time the AA warned that any such increases above inflation will hurt the poorest of the poor. Increased fuel prices impact also impact public transport costs and the cost of transporting goods.

Given the current increased international petroleum prices and the volatility of the rand against the dollar, it is likely that the price of a litre of petrol will increase, in the short term at least, in the view of the AA.

-Fin24