Truth about petrol tax increases in South Africa

The cost of oil, a weak rand, and two much-loathed taxes have significantly increased fuel prices in South Africa in the past decade.

However, some sharply rising costs often overlooked by the general public — including transport fees and wholesale margins — have also had a major impact.

That is according to a MyBroadband analysis of the Department of Mineral Resources’ breakdowns of the most commonly available fuel type in South Africa — unleaded 95 petrol.

The general fuel levy (GFL) is National Treasury’s fourth biggest income stream, with only personal income tax, company tax, and VAT contributing more.

While the tax is imposed on fuel sales, it is not ringfenced for improving roads or related infrastructure but distributed for general government expenditures.

The RAF levy goes towards compensation for victims who lost income or incurred substantial medical expenses due to vehicle accident-related injuries or death.

For many years, the GFL and RAF levy have been targeted by civil society organisations and opposition parties for making petrol and diesel far more expensive for motorists.

That criticism was entirely valid, considering the taxes were regularly increased by far more than inflation, and much of the money was going to a grossly mismanaged RAF.

Intense lobbying and public frustration have likely contributed to the government pausing increases between 2021 and 2024.

In the latest fuel tax development, the GFL was increased by 16 cents in June 2025 as part of the third 2025/2026 budget.

Despite the four-year respite in GFL adjustments and five years with no RAF levy increases, the two taxes have jumped by a compound annual growth rate of 7.11%, compared with 5.21% annual inflation.

Between 2016 and 2025, the GFL and RAF levies have increased by R1.16 and R0.64, respectively. They contribute R6.19 to the price of every litre of unleaded 95 petrol.

The table below shows how some of the more well-known cost components of the petrol price have changed over the last ten years.

Local transport and storage fees skyrocket

However, the biggest contributor to fuel price increases in rand terms in the past 10 years was the oil price, which increased by 38%.

Adding to that is the weakened rand, which makes it more expensive to buy oil in the most common currency it is sold in — the dollar.

The Basic Fuel Price (BFP) is effectively the “landing price” of each type of fuel and reflects factors in the oil price, exchange rate, and international transport and insurance costs.

In June 2016, the BFP of unleaded 95 was R6.05 per litre. By June 2025, it stood at R9.81 per litre. That is an increase of 62%.

The costs that are often overlooked in the equation include local fuel transport, storage and distribution costs, as well as wholesale and retail margins.

Taken together, these costs have increased by 85% in the past 10 years. Where they contributed R2.83 per litre in June 2016, they now make up R5.23 of the price of a litre of petrol.

The per-litre costs of transport, secondary storage, and wholesale margins have all more than doubled, while an entirely new tax — the carbon levy — was added in 2019.

The table below shows a detailed breakdown of the various cost elements that make up the price of unleaded 95 petrol.