An petrol price increase of a few cents per litre costs the South African economy over a billion rand.
An increase in the fuel price of 10 cents per litre costs the economy just over R1 billion per year.
The largest driver behind these considerable increases is rising international product prices for petrol and diesel, which comes off the back of a voluntary output cut of one million barrels of oil per day by Saudi Arabia, the world’s largest oil producer. The fuel price is a major driver of inflation through transport costs and as a universal input in the production of goods.
South Africa is a net importer of petrol, which makes the country’s fuel price highly susceptible to external shocks. The retail margin, RAF levy, and transport cost components increased by 40%, 44% and 49%, respectively, in real terms over the ten years to November 2022.
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