South Africa’s petrol price vs the world — With prices from R23 to R2,660 per tank

South Africa’s petrol price is currently slightly lower than the global average, a comparison by GlobalPetrolPrices.com shows.

However, it could be among the world’s 50 most affordable countries for fuel if certain taxes were scrapped or reduced.

GlobalPetrolPrices’ database of fuel prices includes over 100,000 data points tracked over a decade.

For fuel prices, it uses official national average prices from about 150 countries and over 250 cities globally, updated every week.

It explained a general rule for fuel prices was that poorer countries and those that produced and exported oil tended to have the lowest prices.

The notable exception to this is the United States (US), which is economically affluent but also has low petrol prices due to significant production capacity.

As of July 2024, the average price of unleaded 95 petrol in the US was R18.28, around 20% cheaper than in South Africa.

Iran, the country with the most affordable petrol price, has the world’s fourth-biggest oil reserves and seventh-largest production volumes.

At R0.52 per litre of unleaded 95 petrol, a conventional 45-litre petrol tank would cost R23.40 to fill in Iran.

At the other end of the pack is Hong Kong, which is located on an island that relies heavily on fuel imports and whose government regards fuel as a luxury item.

The country’s fuel retailers no longer sell unleaded 95 petrol, and Hong Kong motorists must pay R59.13 for every litre of unleaded 98 petrol, about 33% of which is taxes.

However, Hong Kong’s public transport network — including mass transit rail — is highly developed, meaning people have more affordable and convenient alternatives.

In many well-developed countries with strong public transport networks, high fuel prices deter people from using their own cars frequently to reduce congestion in busy cities.

Fuel is not regarded as a luxury item in South Africa, which makes sense considering the country’s poor public transport network, which requires a large part of the workforce to drive themselves to the office or other places of business.

However, local taxes comprise about 26% of South Africa’s latest unleaded 95 inland price, not far off Hong Kong’s figure.

With an average unleaded 95 petrol price of R22.87, South Africa ranks the 73rd most affordable out of 169 countries and major cities.

That amount is based on the average of inland and coastal prices, which are R23.26 and R22.47, respectively, in July 2024.

The unleaded 95 price in South Africa is about 4.3% lower than the global average of R23.89.

Petroleum prices are determined by several factors beyond the South African government’s control.

These include oil supply and production capacity, which can be influenced heavily by the OPEC cartel of major producers, and the rand-to-dollar exchange rate.

The latter is partially affected by how government policies and decisions influence the country’s economic growth.

One area where the government has control over fuel pricing is taxes, which many civil rights organisations have argued are exorbitant.

South Africa-dependent neighbours paying less for fuel

A noteworthy observation from the comparisons was that four of South Africa’s six neighbours had cheaper petrol prices.

Three of these countries — Botswana, Eswatini, and Lesotho — do not have coastlines or ports from which fuel can be imported directly.

All of their petroleum is imported or transited through South Africa.

Despite this, their current retail petrol prices are between 5.74% and 7.40% lower than South Africa’s.

Importantly, these countries fuel-related taxes, shown below, are much lower than South Africa’s:

• Botswana — R1.20
• Eswatini — R3.85
• Lesotho — R1.60

If their fuel taxes were on par with South Africa’s R6.14, they would all have had more expensive fuel prices.

In addition, if one deducted South Africa’s R6.14 tax per litre from the average unleaded 95 price, the country would rank as the 34th most affordable globally.

However, the general fuel levy (GFL) is an essential part of National Treasury’s budget and cannot simply be eliminated without causing significant government funding gaps for other important functions.

Scrapping or overhauling the R2.18 levy that goes towards the dysfunctional Road Accident Fund has been supported by organisations like the Automobile Association of South Africa.

“The Fund is in a very poor financial state,” AA spokesperson Layton Beard previously said.

“I think that is a huge concern for government; certainly it’s a huge concern for civil organisations and many people question whether there is actually bang for buck in that tax.”