South African Fuel Price Information

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Fuel Price Composition

Department of Energy Press Releases

Price Change Effective 2 January 2019
Press Announcement: Link
  • Department of Energy Press Announcement –  27 December 2018 (effective 02 January 2019)

 

Fuel Price

2019

 

Date: Petrol 9C: Diesel 9C:
January 2019 R14.01 R13.14

 

 

2018
 

Date: Petrol 9C: Diesel 9C:
December 2018 R15.24 R14.73
November 2018 R17.08 R16.13
October 2018 R17.08 R15.65
September 2018 R16.08 R14.41
August 2018 R16.03 R14.41
July 2018 R16.02 R14.45
June 2018 R15.79 R14.19
May 2018 R14.97 R13.38
April 2018 R14.48 R12.75
March 2018 R13.76 R12.09
February 2018 R14.12 R12.57
January 2018 R14.42 R12.73

 

 

2017
 

Date: Petrol 9C: Diesel 9C:
December 2017 R14.76 R12.96
November 2017 R14.05 R12.45
October 2017 R14.01 R12.12
September 2017 R13.72 R11.76
August 2017 R13.05 R11.26
July 2017 R12.86 R10.97
June 2017 R13.54 R11.57
May 2017 R13.75 R11.80
April 2017 R13.30 R11.50
March 2017 R13.54 R11.61
February 2017 R13.62 R11.63
January 2017 R13.33 R11.42

 

 

2016
 

Date: Petrol 9C: Diesel 9C:
December 2016 R12.85 R11.03
November 2016 R13.05 R11.35
October 2016 R12.60 R10.72
September 2016 R12.17 R10.49
August 2016 R12.35 R10.97
July 2016 R13.34 R11.71
June 2016 R13.26 R11.29
May 2016 R12.74 R10.53
April 2016 R12.62 R10.54
March 2016 R11.74 R9.58
February 2016 R12.43 R9.43
January 2016 R12.37 R10.05

 

2015
Date: Petrol 9C: Diesel 9C:
December 2015 R12.40 R10.81
November 2015 R12.39 R10.84
October 2015 R12.61 R10.93
September 2015 R12.57 R10.41
August 2015 R13.26 R10.95
July 2015 R13.77 R11.70
June 2015 R13.36 R11.66
May 2015 R12.89 R11.17
April 2015 R12.89 R11.22
March 2015 R11.27 R10.00
February 2015 R10.31 R9.26
January 2015 R11.24 R10.28

 

2014
Date: Petrol 9C: Diesel 9C:
December 2014 R12.47 R11.32
November 2014 R13.16 R11.85
October 2014 R13.61 R12.46
September 2014 R13.66 R12.59
August 2014 R14.33 R12.84
July 2014 R14.33 R12.90
June 2014 R14.02 R12.76
May 2014 R14.24 R12.99
April 2014 R14.39 R13.29
March 2014 R14.32 R13.38
February 2014 R13.96 R13.11
January 2014 R13.57 R12.87

 

2013
Date: Petrol 9C: Diesel 9C:
December 2013 R13.19 R12.54
November 2013 R13.02 R12.44
October 2013 R13.30 R12.60
September 2013 R13.50 R12.62
August 2013 R13.55 R12.48
July 2013 R13.23 R12.15
June 2013 R12.39 R11.37
May 2013 R12.47 R11.41
April 2013 R13.20 R11.96
March 2013 R13.08 R11.87
February 2013 R12.27 R11.29
January 2013 R11.86 R11.11

 

2012
Date: Petrol 9C: Diesel 9C:
December 2012 R12.01 R11.38
November 2012 R12.10 R11.43
October 2012 R12.20 R11.33
September 2012 R11.97 R10.94
August 2012 R11.04 R10.25
July 2012 R10.82 R10.10
June 2012 R11.67 R10.73
May 2012 R12.22 R10.98
April 2012 R11.94 R10.88
March 2012 R11.23 R10.37
February 2012 R10.95 R10.26
January 2012 R10.61 R10.27

 

How Petrol Prices are Calculated in South Africa (Source: SAPIA)

The petrol retail price is regulated by government, and changed every month on the first Wednesday of the month. The calculation of the new price is done by the Central Energy Fund (CEF) on behalf of the Department of Energy (DOE). The petrol pump price is composed of a number of price elements and these can be divided into international and domestic elements.

The international element, or Basic Fuel price (BFP), is based on what it would cost a South African importer to buy petrol from an international refinery and to transport the product onto South African shores. The diesel retail price is not regulated. The retail margin is estimated to be similar to regulated retail margin on petrol.

After a detailed investigation in 2002, the BFP was implemented in 2003 by the then Department of Minerals and Energy (DME). The BFP replaced the IBLC formula which was previously in place. In 1994, the Liquid Fuels Task Force – then a sub-committee of the forerunners of Nedlac – reviewed the details and made certain changes to make prices more competitive.

The IBLC system used the daily average of five published world oil prices for the product concerned to arrive at the international portion of the regulated price of the particular product. These were the posted prices of three refineries in Singapore, an assessment of the Singapore spot market price and the posted price of a refinery in Bahrain.

In April 2003 the system was changed to use spot prices instead of posted prices. The spot prices used are:
• For petrol: 50% Mediterranean/50% Singapore.
• For diesel and paraffin: 50% Mediterranean/50% Arabian Gulf.

The BFP formula was an improvement in the way the system links to world markets and is still in use. The DOE is in the process of reviewing the BFP to ensure that assumptions used are still relevant and appropriate. If prices are to be controlled, it is prudent for the control mechanism to be linked to world markets.

The cost of shipping and related costs of importing into South Africa are added to these prices. The resultant dollar basic price is converted to rand at the daily $/R exchange rate ruling at 11:00 South African time. The main difference between the BFP and the IBLC is that the BFP is based on the spot prices quoted daily in specified international markets, whereas the IBLC was based on certain refinery gate postings which were found not to be reflective of actual market prices.

There are two main constituents of the prices of controlled petroleum products:

  • The internal factors – the rand-based retail and oil company marketing margins, transport costs and taxes and levies.

The external factors move constantly and account for most of the monthly movements in prices. Both the world market price of oil and the exchange rate are outside the control of the industry. The Monthly Pricing System, whereby the controlled prices are changed on the first Wednesday of each month, takes account of movements in these factors. When the various internal factors are adjusted – usually once a year – these movements are also included in the relevant monthly price change.

Movements in the rand-based elements (internal factors) are subject to government control. They comprise adjustments in taxes and levies, transport costs, wholesale margins, retail margins and service costs. The overriding rationale of the control of prices and margins should be to ensure that the various stakeholders in the industry earn fair returns. The returns should be sufficient to encourage the needed investment in the industry, while not being such as to represent over-reward.

 

Marketing profitability was previously governed by the Marketing of Petroleum Activities Return (MPAR) system. This system had its roots in the 1970s when the government of the day applied price control to various industries. Under the MPAR system, an aggregate oil industry marketing profit acceptable to government was between 10% and 20% of assets. Should returns fluctuate within the 10-20% band, then no increase or decrease would be due. Should returns go above 20%, then a margin decrease was indicated. Should the return fall through the 10% ‘floor’, a margin increase was indicated.

When an adjustment was made, the new cents per litre marketing margin was set at a level which would have delivered a 15% return for the year under review.

The MPAR system, as well as the guidelines to determine the service differential (secondary storage and distribution), was applied for the last time in 2004. The then Department of Mineral and Energy Affairs (DME) commenced with a review of the methodologies for setting wholesale, distribution and retail margins of petroleum products to remove hidden costs and cross subsidies between regulated and unregulated activities and between rural and urban retail sites.

The DME was also of the view that this review would assist in preparing the sector for eventual deregulation.
The review proposed the use of regulatory accounts to set appropriate margins for retail petrol. From 2004 until 2011, when the regulatory accounting system (RAS) transitional phase commenced, no regulatory system was in place to determine retail petrol wholesale, secondary storage and secondary distribution margins.

For the review, the following principles were accepted as important for the viability of the industry:
• The industry needs a predictable regulatory system to encourage investment by existing and new entrants.
• The margin needs to sufficiently reward investment across the value chain.
• Investment returns need to be sustainable.

The above principles must be balanced with the principle of efficient prices for consumers and, through RAS, prices are based on a transparent and defendable methodology.

The Regulatory Accounting System (RAS) determines margins for retail petrol only. The main reason is because retail petrol is a regulated product and the price per fuel zone is promulgated in the Government Gazette on a monthly basis.

The transitional phase of the RAS lasted for a period of two years with end-state implementation on 4 December 2013. The transitional phase was necessary to enable market players to prepare for the end-state implementation as this system leads to substantial changes in the way business was done in the past in the fuel industry.

RAS provides a transparent, justifiable and predictable mechanism that will provide acceptable returns to current and future investors in petroleum marketing activities in South Africa during the period in which these activities remain regulated.