Petrol prices explained
The price of petrol, while it is often crippling, involves a lot more than the numbers you see on the screen at the petrol pump.
But how many of us really understand what the cost of petrol involves? There are various factors that determine the price of petrol at any given time.
All about the money
Also read: Electric vehicle vs petrol – look at what you could save!
South African motorists breathed sigh of relief earlier in March when the cost of petrol dropped a bit.
Since the 1980s petrol has doubled every six and a half years, according to research.
From next month (April 2016) fuel levies will rise by 30 cents a liter and affect the overall cost of fuel available to us.
The constant rise in fuel costs leaves some of wondering what exactly these prices go towards and why.
Petrol pricing explained
According to the Automobile Association of South Africa, petrol prices are adjusted each month and largely depend on the exchange rate and international petroleum prices.
Factors associated with shipping costs to transport the petrol to South Africa can determine the Basic Fuel Price (BFP).
Fuel levy and RAF levy
The price of petrol also includes other transport expenses that occur when getting the petrol from the harbour to the next area. Customs and excess duties, storage costs and more importantly the Fuel Levy and Road Accident Fund Levies are all factors that affect what numbers show up at the petrol pump.
Take a look at the infographic below for a great breakdown of what you can expect to pay for petrol and why:
Source: The Automobile Association (AA)
Read more: How much did you spend on fuel this month?