Every month the Department of Mineral and Petroleum Resources (DMPR) announces new fuel prices, usually effective from the first Wednesday of the month. The figure at the pump is not a market price in the usual sense. It is built up from a regulated formula with several distinct components.
1. The Basic Fuel Price (BFP)
The BFP represents what it would cost to import a litre of refined fuel into South Africa. It is an import parity price: it assumes product is bought on international markets and shipped to South African ports. It includes the international product price, ocean freight, insurance, cargo dues, coastal storage and related costs, all converted into rand.
Because it is calculated in dollars and converted, the BFP moves with two things: international refined product prices and the rand–dollar exchange rate. The department tracks both daily and averages them over the review period.
2. Taxes and levies
A substantial, largely fixed portion of every litre is tax:
- General Fuel Levy — collected by National Treasury and set in the annual Budget.
- Road Accident Fund (RAF) levy — funds the Road Accident Fund.
- Customs and excise duty.
- Demand Side Management Levy — applied to 95 petrol inland.
- Slate levy — used to recover past under-recoveries (see our explainer).
3. Margins and transport
Regulated wholesale and retail margins compensate the companies that store, distribute and sell fuel. A transport cost or zone differential is added to reflect the cost of moving fuel inland, which is why Gauteng prices are higher than coastal prices.
Petrol, diesel, paraffin and LPG are treated differently
Petrol is regulated all the way to the pump. Diesel and illuminating paraffin are regulated at wholesale level, with a single maximum national retail price for paraffin. LPG has a regulated maximum retail price. This is why diesel pump prices can vary between sites while petrol prices within a zone are identical.
Why this matters to buyers
For commercial buyers, the BFP is the part of the price that moves. Understanding its drivers helps you anticipate adjustments and structure supply contracts sensibly. Our supply and trading team can explain how import-based supply relates to these regulated benchmarks.
Published by African Energy Enterprises. This article is general information and does not constitute legal, tax or financial advice. Regulated prices and rules change; confirm current figures with the relevant authority.
