SA Diesel Price Report - May 2022
Steven Roberts, Supply Chain Consultant, Zebrina Solutions
2022-05-05
Introduction
This report serves to visualize the key components that are used to build up the price of Diesel (50ppm) on a monthly basis in South Africa. It looks at the trends in two key inputs to the pricing structure, specifically that of the price of Brent crude, as well as the USD ZAR exchange rate.
The figures displayed here in this report are based on a month-to-month period, with the month starting on the 1st, and ending on the last day of that specific month.
In terms of the pricing structure implemented by the Central Energy Fund (CEF), who regulates and controls the official fuel pricing in South Africa, their figures are usually captured from the last Wednesday, Thursday or Friday of the prior month, to a period of 30 or 31 days following that. This is due to fuel pricing officially changing at midnight on the 1st Wednesday of every month.
Due this difference, the figures presented here will never match exactly what the CEF publishes, however the difference is usually just a few ZAR cents. The goal of this report is to visualize medium-to-long term trends, and their impact.
Diesel Fuel Price Structure
- Basic Fuel Price + Taxes (Fuel, Road Accident Fund, Customs & Excise, IP Tracer) + Slate + Regulated Margins (Wholesale, Secondary Storage, Secondary Distribution) + MDZ Zone Differential (1A or 2A or 3A etc) = Wholesale List Price
- BFP is primarily influenced by 2 key factors: USD ZAR exchange rate & price of Brent crude.
Data Tools
- Excel for cleaning & processing.
- R for analysis & visualizations.
Licensing
- Visualizations are free to use. Credit to Zebrina Solutions would be appreciated.
Wholesale List Price (WSLP)
- 121% increase in BFP year-on-year.
- Slate continues to be applied monthly (since Aug 2021).
- Tax (Fuel Tax & RAF levy) reduction continued from previous month (Apr 2022).
- Zone diff. (1A) reduced from 3.4 ZAR/cpl to 2.7.
- BFP now compromises 70.38% of total WSLP (up from 48.53% in Jun
2021). - Tax now compromises just 21% of total WSLP (down from 42.67% in
Jun 2021).
USD/ZAR Exchange Rate
- Continued strength of the Rand since Jan 2022 has provided some reprieve in the impact on BFP.
- However, a sudden weakening in the first few days of May has reversed this trend.
- Continued over-recovery (leading positively to a decrease in BFP)
until the first few days of May. - Expected trend for May to smooth
out.
Brent Crude
- Continued upward surge of the price of Brent since Jan 2022, driven by the Ukraine-Russia War.
- Some reprieve in April provided after market settled from its initial tension.
- Crude impact on BFP continues to be devasting, pushing the BFP to
record highs.
Basic Fuel Price (BFP)
- On a daily basis, BFP continues it upward trend, driven predominantly by the weakness in Brent Crude.
- Strength in the Rand has had little effect in slowing this upward movement.
- Consolidated view on BFP showing continued ‘Under Recovery’, and
the subsequent increase in BFP and WSLP.
For any questions or comments, contact Steve at steve@zebrinasolutions.co.za