Petrol could cost R15.42 per litre in South Africa if there were no fuel taxes

Approximately two-thirds of the price of fuel charged at the pump is made up of taxes levied by the National Treasury to fund government expenditures. 

National Treasury’s data shows that South Africans pay R6.37 in taxes for each litre of 93-octane petrol and R6.24 per litre of diesel at the pumps. This means, without taxes, motorists could pay R15.42 per litre for petrol and R13.11 for diesel.

This is primarily comprised of the General Fuel Levy (GFL), the Road Accident Fund (RAF) Levy, the customs and excise levy, and a carbon tax. 

The funds generated by these taxes, apart from the RAF levy, generate revenue for the central government, which can be used as it sees fit. 

In this year’s Budget, the Finance Minister implemented an inflation-linked increase to the GFL for petrol and diesel to help make up for the lost revenue after the VAT hike was withdrawn. 

This resulted in the GFL increasing to R4.01 per litre for 93-octane petrol and R3.85 per litre for diesel, making it the largest tax levied on the price of fuel in South Africa by some distance. 

The taxes levied on fuel in South Africa are a significant contributor to the high price of petrol and diesel in the country. 

As a share of the price at the pump, these taxes account for 29.23% of the petrol price and 32.25% of the diesel price. 

These taxes have also risen significantly over the past decade, far outstripping the headline inflation rate to push fuel prices higher. 

The GFL, for example, has risen by 57.25% since 2015, while the RAF levy has shot up by 41.56%. The customs and excise duty has remained unchanged. 

In total, these taxes have risen by R4.13 for each litre of 93-octane petrol to R6.23 in 2025 – an increase of 50.85% in a decade. 

This exacerbates other factors that drive up the price of fuel, such as international oil prices and the strength of the rand. 

These two factors account for over 60% of the fuel price in South Africa and are highly susceptible to geopolitical events outside the country’s control. 

For example, the recent 12-day conflict in the Middle East pushed oil prices higher and weakened emerging market currencies, such as the rand. 

This translated into a substantial increase in the price of fuel in South Africa, with both petrol and diesel rising by over 50 cents per litre. 

The table below breaks down the various taxes levied on fuel in South Africa, showing how much each contributes to the final price. 

This excludes other levies and margins added to the price of fuel by the Department of Mineral and Petroleum Resources. 

These include the transport cost of moving the fuel, the petroleum products levy, the wholesale margin, the retail margin, and the storage margin. 

Taxes on petrol and diesel	93 Octane Petrol	Diesel 0.05%
General fuel levy	R4.01	R3.85
RAF levy	R2.18	R2.18
Customs and excise levy	R0.04	R0.04
Carbon tax	R0.14	R0.17
Total	R6.37	R6.24
Pump price (inland)	R21.79	R19.35
Tax as % of pump price	29.23%	32.25%

Real reasons why South Africans pay so much for fuel

The consistently above-inflation increases in the administered components of fuel prices have been coupled with a steady weakening of the rand. 

Over the past decade, the international price of oil has remained relatively flat, increasing by only 11.37% since 2015. 

In contrast, the price of fuel at the pump in South Africa has nearly doubled over the same time period, pointing to other reasons for its rise. 

Alongside increases to the taxes levied on fuel, a significantly weaker rand has increased the cost of importing oil and refined products into South Africa. 

This directly increases the cost of fuel at the pumps, with a stronger rand making importing fuel cheaper, while a weaker rand increases the price.

While the rand’s sharp swings in the short term capture attention, its longer-term steady decline is reflective of South Africa’s poor economic performance.

As a result, the rand has lost around 5% of its value to the dollar every year over the past decade, with the country’s economy stagnating. 

Old Mutual’s chief economist, Johann Els, explained that the value of the rand is reflective of investor sentiment towards South Africa, which is influenced mainly by economic fundamentals. 

As such, the rand’s constant decline versus the dollar over the past decade reflects deteriorating investor confidence in the South African economy and increased political uncertainty. 

The Bureau of Economic Research (BER) points to another reason why the rand has weakened steadily versus the dollar over the past decade: inflation. 

South Africa’s headline inflation is typically higher than that of developed countries, including the United States, requiring a degree of currency depreciation to ensure exports remain competitive. 

As inflation increases the cost of producing goods, it makes them less attractive for export. To counteract this, a currency is weakened to make the country’s exporters relatively cheaper in the global marketplace. 

These longer-term factors behind the rand’s weakening have been coupled with short-term hits for currency from declining commodity prices, rising global uncertainty and domestic political instability. 

The declining value of the rand compared to the dollar can be seen in the graph below, which shows its gradual decline over the past decade.