Truth behind South Africa’s high petrol price

The recent decision to hike the General Fuel Levy (GFL) has understandably drawn the ire of the public in South Africa, who are already grappling with a cost of living crisis.

Earlier this month, the GFL was raised for the first time in three years after the government’s previous decision to increase VAT was shot down.

Consequently, the GFL now adds R4.01 to the cost of every litre of petrol sold in the country.

This increase is on top of external factors adding to the cost of fuel, such as the international trading price of crude oil and the deteriorating value of the rand.

The GFL is the National Treasury’s fourth largest revenue stream, only surpassed by personal income tax, company tax, and VAT.

While the tax is imposed on fuels, the money it generates is not set aside for road-related projects but is available to the government to spend as it sees fit.

Another major tax is the Road Accident Fund (RAF) Levy, which adds R2.18 per litre to the cost of petrol and diesel and is meant to compensate victims of vehicle-related incidents for lost income or serious injuries.

For many years, these two levies have been targeted by civil action groups and opposition parties, who argue that they make fuel far more expensive than it needs to be.

It’s a valid criticism, too, given that these taxes are regularly increased above the rate of inflation, and the RAF frequently spends money on lengthy court battles.

These factors have all been widely covered and are a major contributor to the sky-high numbers seen at the pump, but they aren’t the only factors.

The truth is that several other costs that are often overlooked, such as transport fees and wholesale margins, have also had a noticeable effect on fuel prices in South Africa over the last few years.

Transport and storage fees hitting motorists’ wallets

Fuel transport, storage, and distribution costs, as well as wholesale and retail margins have had significantly increased over the last 10 years.

Collectively, these factors added R2.83 per litre in June 2016, which has jumped 85% to R5.23 per litre in June 2025.

For context, these operating costs now represent 24.4% of the R21.35 per litre retail price of petrol 95.

The per litre cost of transport, secondary storage and wholesale margins have more than doubled in the last decade, and an entirely new carbon levy was added in 2019.

The following table shows how these costs have changed over the past decade: