How South Africa's Petrol Price Is Actually Set

The price is built, not chosen

South Africa does not let the market freely set the petrol price at the pump. The price is regulated and built up from a stack of components, each one published by the Department of Mineral Resources and Energy (DMRE) working with the Central Energy Fund. Garages may not charge more or less than the regulated price for 95 unleaded inland. That is why a litre costs the same at a Shell in Soweto as at an Engen down the road.

Think of the R28.06 you pay for 95 inland in June 2026 as a tower of blocks. The biggest block is the cost of the actual fuel on the world market. On top of that sit two government levies, a slice for the wholesaler, and a slice for the retailer who owns the forecourt. Add them up and you get the regulated price. Nobody at the garage gets to negotiate it.

The Basic Fuel Price: import parity and the rand

The foundation block is the Basic Fuel Price, or BFP. South Africa works out what it would cost to buy refined petrol on the international market and ship it here, even when the fuel is refined locally. This is called import parity pricing. The BFP tracks international refined-product prices, which move closely with crude oil, plus shipping, insurance, wharfage and other landing costs.

Two moving numbers drive the BFP. The first is the international oil and refined-fuel price, quoted in US dollars. The second is the rand/dollar exchange rate. Because we buy fuel in dollars, a weaker rand makes petrol more expensive even if the oil price has not moved. This is the part of your pump price nobody in South Africa controls: it is set in global markets and currency trading rooms, not in Pretoria.

This dollar-and-oil dynamic is why the price can jump even when there is no obvious local reason. A flare-up in an oil-producing region, a decision by oil-producing nations to cut output, or a bad run for the rand can each push the BFP up. When the rand strengthens and oil softens at the same time, you get a rare double break and the price falls.

The two levies: where your tax goes

On top of the fuel itself, government adds two fixed levies that make up a large, and very visible, chunk of every litre.

The General Fuel Levy is a tax that flows into the national budget. It is not ring-fenced for roads or anything specific; it is general revenue, like income tax or VAT. The Road Accident Fund (RAF) levy is the second one, and it funds payouts to people injured in road crashes. Both are flat rand amounts per litre, set by the Minister of Finance in the annual Budget, so they do not move with the oil price. They change only when Treasury decides to change them.

• •General Fuel Levy — goes to the national fiscus as general tax revenue.
• •RAF Levy — funds compensation for victims of road accidents.
• •Because both are fixed per litre, they are a bigger share of the price when fuel is cheap and a smaller share when fuel is expensive — but the rand amount you pay stays the same either way.

Margins: the wholesaler and the garage

The final blocks are the regulated margins. The wholesale margin covers the oil companies that store, blend and distribute the fuel. The retail margin goes to the person who actually runs your local filling station, covering staff wages, rent, electricity and the small profit the forecourt makes on fuel.

These margins are also regulated and reviewed by the DMRE, which is why competing garages cannot undercut each other on the petrol price itself. It is also why fuel retailers often say they make very little on a litre of petrol and lean on the shop, the car wash and the coffee to actually turn a profit. Transport and distribution costs are added too, which feeds into the inland-versus-coastal difference below.

Why the first Wednesday, and why inland costs more

The price changes once a month, taking effect on the first Wednesday. Through the month, the Central Energy Fund tracks the daily moves in oil prices and the rand and works out the average gap between what the price should have been and what you actually paid. That accumulated daily average becomes the adjustment announced near month-end and applied on the first Wednesday. So the new price is really a catch-up on a month of small daily movements, not a single day's snapshot.

Inland prices are higher than coastal prices for a simple reason: distance. Fuel lands at the coast, at ports like Durban, and then has to be pumped or trucked hundreds of kilometres up to Gauteng and the interior. That transport cost is added on, which is why Johannesburg and Pretoria motorists pay more per litre than people in Cape Town or Durban. The R28.06 figure for June 2026 is the inland 95 price; the coastal price for the same grade sits a bit lower.

Practical takeaways for motorists

You cannot beat the regulated price by shopping around between garages, but you can use how the system works to your advantage.

• •Watch the late-month announcements. The DMRE and Central Energy Fund signal the coming change before month-end, so you usually get a few days' warning of a hike or a drop on the first Wednesday.
• •Time a big fill-up around a known change. If a hike is confirmed, filling the tank on the Tuesday before locks in the old price; if a cut is coming, running low and filling after the change saves a little.
• •Don't blame your local garage. The retail margin is a small, fixed slice. The big swings are the oil price, the rand and the levies, none of which the forecourt controls.
• •Remember the levies are fixed in rands. When fuel is expensive, the levies are a smaller share of the total, and the global fuel cost is doing most of the damage.
• •Coastal travel is cheaper at the pump. If you are road-tripping to the coast, fuel there is marginally cheaper per litre than inland.

Frequently asked questions