New petrol price margins to favour retailers

Petrol prices in South Africa are regulated and recalculated monthly according to movements in the rand and oil prices, and changes to taxes. (Oupa Nkosi, M&G)

Petrol prices in South Africa are regulated and recalculated monthly according to movements in the rand and oil prices, and changes to taxes. (Oupa Nkosi, M&G)

South Africa will cut the proportion of fuel prices paid to wholesalers while boosting the margin allocated to petrol retailers to reward companies that invested in the industry, the Department of Energy said.

The new pricing system, implemented from December 4, will better align the returns received from fuel sales with investment, Robert Maake, director of fuel pricing at the department, told reporters in the capital, Pretoria, on Thursday.

Petrol prices in South Africa are regulated and recalculated monthly according to movements in the rand and oil prices, and changes to taxes. Currently, the retail margin is R1.04 a litre  and the wholesale margin is 0.58 rand a litre. Petrol cost R13.02 a litre in November. 

The adjusted margins will be released tomorrow.
"If we follow the principle that margins should follow investment, it makes sense that some companies will be taking less," Avhapfani Tshifularo, executive director of the South Africa Petroleum Industries Association, said by phone. – Bloomberg

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