What’s up with SA’s latest fuel hikes? It is particularly concerning for fleet managers where fuel is a number one expense.
In the last five months, South Africans have enjoyed a decrease in petrol prices including a recent reduction of R1.14 per litre in October 2024. While the price drop comes as a relief for our pockets, the price of petrol is still hanging above R20.00 per litre, which is still a concern for businesses. As the problem persists, we need to understand how our petrol prices compare to other countries and consider them within our economic landscape. So let's take a trip around the world and compare fuel prices, and then touch on how fleet owners can ease the impact.
But first, let’s take a trip down memory lane so we can get the full picture.
On average, South Africa's fuel price has risen by 335.98% since January 2000.
Petrol 95 is the fuel type that experienced the biggest overall increase, of 368%, while Diesel 50ppm grew by 51% since 2008. Just to mention, Diesel 50ppm was only introduced into the country in 2006, with the earliest official price records we could find dating back to 2008.
2008 was the first year where the country experienced double-digit fuel prices, where Petrol 95 climbed to R10.70 and Diesel 50ppm to R11.35. As we know, fuel prices fluctuate and there was a period between 2008 and 2011 where petrol prices did drop below R10. However, 2011 was the last year of petrol prices being below R10.
Check out this graph which details South Africa’s average fuel prices, as provided by the Automobile Association (AA) and DOE websites, from January 2001 to September 2021. It must be noted that the petrol prices used in this graph were recorded as inland prices from 2006 onwards, whereas all diesel prices are based on historical coastal prices.
That being said, coastal fuel prices are generally lower. Fast forward to current times, from January to October 2024, inland fuel prices decreased from R22.17 to R20.73.
The main reason for the price increases is the movement in the international price of crude oil. The acceleration is due to the escalating conflict in the Middle East, which continues to pose a risk to the supply of crude oil. However, there are other factors contributing to the overall fuel price. We will help you understand where all these figures come from.
According to the AA, South African fuel price calculations take into account the following 5 elements:
Now that you know everything about the fuel price, let’s unpack a few more interesting insights. These taxes and levies are adjusted regularly, with 2021 facing an increase in two of the largest levies on fuel – the GFL and RAF. The cost of petrol can further be influenced by the price of crude oil, international politics, and the exchange rate between the Rand (ZAR) and Dollar (USD).
It is predicted by several economists that the prices of both petrol and diesel may worsen soon, given the exchange rate between the Rand and the US Dollar and worldwide developments.
According to GlobalPetrolPrices.com, there is a significant difference in petrol prices among countries. Although all countries have access to the same petroleum prices in international markets, they can decide to impose different taxes, resulting in a difference in the retail price of gasoline. As a rule of thumb, richer countries generally have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the U.S. which is an economically advanced country but has low gas prices.
According to data tracked by GlobalPetrolPrices.com, as of 30 September 2024, the average price of gasoline around the world is 1.28 U.S dollars per litre (R22.30). The current petrol price per litre in South Africa is sitting at R20.73 a litre, putting us within the average on a global scale.
However, it is considerably high as each country has a different economic situation making petrol prices relative. For example, other countries might compensate citizens in other areas or have a higher average daily income.
South Africa ranks 66th overall (out of 157 countries) with the most expensive fuel prices per litre, crossing us over the middle ground.
If South Africa’s petrol price rises above the R23.50p/l mark in the upcoming months, then we are in the top 50 most expensive countries for fuel. SA has always occupied near the cheapest countries around the middle-ground rather than the costliest ones – so this shift is concerning.
Petrol prices might be high in SA, but we are not even in the top 10. Here is a list of countries with the highest petrol prices.
Let’s take a look at petrol prices around the world in rands per litre from 30 September 2024.
Did you know that Iran currently has the cheapest petrol price in the world?
Here is a list of countries that don’t pay much for petrol per litre, in fact, some pay as little as less than R1-per-litre.
According to the average retail prices for gasoline in Africa as of February 2024 by country, the Central African Republic has the highest at 1.82 dollars per litre. Followed by Zimbabwe, Senegal, Morocco, Seychelles, and then South Africa at number 24.
On the flip side, consumers living in traditional crude oil producers in Africa, such as Egypt, Nigeria, Angola, Algeria, and Libya, spent less money on gasoline.
South African petrol prices are generally higher than its African neighbours except for Zimbabwe. Although all of Botswana’s petrol is imported from South Africa, its petrol price is $1.10, while Namibia has the lowest price at $1.09.
For interest’s sake, why is fuel cheaper in Botswana than in South Africa?
Botswana does not have to pay the tax duties and other things levied onto the petrol.
Higher fuel prices have a direct effect on consumers impacting motor vehicle running costs, transport costs, and consumer goods. If you are running a fleet operation with multiple vehicles– fuel prices are one of the top expenses to take into consideration.
Cartrack, a leading SaaS fleet provider can give you actionable insights you can immediately use to reduce fuel costs.
Now is the time to get your hands on these fuel-saving features:
Contact us and save on fuel today.
Rising fuel costs remain a key concern for fleet managers, as the unpredictable fuel prices in South Africa forces businesses to adapt their approaches to cost management.
