What are you actually paying for with fuel?

What are you actually paying for with fuel?

Posted by Chelsy Pinto on 15 May 2017

What are fuel costs made up of in South AfricaWith the petrol price in major flux, we thought we’d breakdown all the factors which contribute to the petrol price and the knocks to your wallet.

We all breathe a sigh of relief whenever the fuel price drops, only to roll our eyes at the next hike; but when it comes to knowing what we’re paying for the true cost of fuel is a bit of a mystery.

What you’re actually paying for with fuel

  • Basic fuel price (including freight insurance, storage, financing, etc.)

The basic fuel price is dependant on two factors: the cost of crude oil and the Rand / Dollar exchange rate. At the time of publishing (April 2017) South Africans are paying the following basic costs towards fuel:

  • R5.49 per litre
  • R274.50 per 50 litre tank

Ever wondered if you should be  filling up with 93 or 95? Find out more about the difference, read our  blog 93 vs 95:  how to choose the right fuel for your car.

Fuel levy

The National Road Act of 1971 states that the South African Government collects a fuel levy charged at a rate per litre of fuel sold - this is used towards road upkeep and maintenance (for example the eToll system in Gauteng). South Africans currently pay:
  • R3.15 per litre
  • R150.50 per 50 litre tank

Road Accident Fund levy

The Road Accident Fund (RAF) is a state insurance policy which covers South African Motorists from liability in the event of an accident causing, for example, injuries as a result of a collision. South Africans currently pay:
R1.63 per litre
R81.50 per 50 litre tank

Other (including storage, wholesale and retail margins, transport and distribution costs, etc.)

Wholesale and retail margins go to the organisations sourcing and retailing fuel. This helps them cover their overhead costs and includes a profit margin. Other costs like transport and distribution are also added to the fuel price - this is why a coastal city like Durban or Cape Town pays less for fuel than an inland city like Pretoria, as there is a greater distance to travel from the harbour. South Africans who live inland are currently paying:
  • R3.03 per litre
  • R158.50 per 50 litre tank

As you can see, there’s a number of different factors contributing to the overall cost of fuel, which is why we experience such high fluctuation in petrol and diesel prices. The only way to combat this fluctuation is to make allowances for worst case scenarios in your budget when choosing a car.

Fuel consumption is one of many factors to consider when determining your budget for purchasing a car. Download the Guide to buying your child’s first car to find out how to choose a reliable car that fits in with your (and your child’s) budget whilst still ticking the important boxes on their wish list.

Looking  at buying a car? Download  this helpful   eBook on questions to ask your dealer.. This guide was designed to help you to know what kind of questions you should be asking your dealer to get the best  deal on your new car..

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Topics: Driving a car

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