/ 5 January 2009

Petrol price at pump to differ from base price

Actual petrol price changes at the pump will differ from the change in the base price as announced by the Department of Minerals and Energy on Friday, the South African Petroleum Industry Association (Sapia) said on Monday.

The reason is that there are significant changes to the zone differentials across all areas, Sapia said.

”These changes differ by zone and dealers and customers will need to confirm the correct price against the price schedule expected to be published in the Government Gazette this week.”

Zone differentials signify the cents per litre costs of moving fuels from coastal port or refinery locations to inland distribution centres, by pipeline, rail or road.

These are determined by individual magisterial districts and calculated by the oil industry, subject also to ministerial approval for inclusion in oil company wholesale price structures.

Last week, the Department of Minerals and Energy said petrol, diesel and paraffin would decrease by between 131 and 175 cents per litre on Wednesday.

According to Sapia, the pump price is compiled from a number of factors including the basic fuel price, government taxes and levies, the wholesale margin, the service differential (oil company depot operating costs and road delivery expenses), zone differentials, the wholesale price (maximum price oil companies are permitted to charge service stations) and dealer margin (cents per litre which service stations are permitted to add to the petrol price).

Added to these considerations are pump rounding factors (this ensures that oil companies do not gain or lose by charging wholesale price levels in whole cents and that service stations recover the full dealer margin), as well as the retail price at the pump. — Sapa