Petrol tax in South Africa vs the UK, USA, Australia, and India

Petrol may be very expensive in South Africa, but it’s not as bad as it could be if other countries are anything to go by.

The two biggest contributors to the cost of fuel in South Africa are the General Fuel Levy (GFL), which adds R3.84 per litre to the price of diesel, and the Road Accident Fund (RAF) levy, which contributes another R2.18 per litre.

Together, the GFL and RAF levy contribute R6.02 per litre to the fuel we put in our cars, which works out to 29.7% of the final cost we see at the pump, based on November’s rate of R20.22 per litre for petrol 93.

To put this in perspective, TopAuto examined the fuel price structure in four other countries – Australia, India, the United Kingdom (UK), and the United States (US) – to see if we are paying substantially more than the global average.

What other countries are paying

Starting with the UK, it has two main taxes on petrol – a national fuel duty and value added tax (VAT).

The fuel duty is a flat rate of 52.95p (pence) per litre, while VAT is set at 20% of the purchase price.

As a result of both of these factors, residents in the UK are paying £1.35 per litre for petrol as of November 2024.

Of this sum, approximately 22.63p is the result of VAT, which combined with the fuel duty, means 75.58p of every litre is tax.

The United States is a bit more complicated, as the cost of petrol (gasoline) varies from state to state.

This is because the US employs two main levies on fuel – one at a federal level and another at a state level.

The federal tax is primarily intended to pay for and maintain the country’s interstate highway system and has been sitting at 18.4c (cents) per gallon (4.8c per litre) since 1993 as it is not adjusted for inflation.

Each state, on the other hand, sets its own gasoline levy to pay for its own road infrastructure projects, which means that states with higher populations tend to have much higher rates than smaller ones, according to the Tax Foundation.

Alaska has the lowest tax at 8.95c per gallon (2.36c per litre), while California is paying the most at 68.1c per gallon (17.99c per litre).

Using California as the highest rate Americans are paying for fuel on average, citizens in that state are spending $4.355 per gallon ($1.15 per litre) on petrol – 22.79c of which is going towards taxes at both the state and federal level.

As for Australia, it only has one main tax in the form of a federal excise duty, though a Goods & Services (G&S) tax (equivalent to VAT) of 10% is applied on top of this.

Fuel taxes in Australia used to be set at the state level, but this was changed in 1997 following a legal precedent, which gave way to the national duty.

The excise duty is adjusted twice a year and is currently set at 50.6c per litre.

Petrol is retailing for 1.62 Australian dollars (AUD) per litre – 15c of which is coming from the G&S – meaning that 65.6c of each litre is taxes.

Finally, there’s India, which also uses an excise duty and VAT managed by the central government.

The excise contributes 19.90 Indian rupees (INR) while VAT is calculated at 19.4% of the final price, adding another 15.39 rupees per litre as of November 2024.

This is a combined total of 35.29 rupees, which goes towards the final price of 101.02 rupees.

The following table shows how much each country is paying for petrol, and what percentage is the result of taxes.

The UK is the standout with a tax rate of over 50%, compared to South Africa’s own standard of roughly 30%.

Australia’s is also quite high while India’s is the most comparable to our own in terms of how much the state collects on every litre.

Something interesting to point out is petrol is exempt from South Africa’s 15% VAT, which is something that Australia, India, and the UK don’t do.

However, the RAF levy essentially funds a nationwide insurance policy for all road users, and the VAT collected by these other countries is used to fund things like their national health services, so the RAF levy arguably fills a similar role in this regard.

In any case, the clear winner here is the USA, which has the lowest tax rate even when using its most expensive state as a benchmark, illustrating how much more affordable fuel is there compared to other markets.