Why SA fuel is cheaper in Botswana

Published Apr 3, 2000

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Motorists visiting neighbouring countries are often mystified at the lower price of their fuel, which they obtain from South Africa in the first place.

After all, it does seem strange that petrol bought from South Africa is cheaper at the pumps in Lesotho, Swaziland, Botswana and Namibia.

Not really, explains Hein Baak of the Department of Minerals and Energy. It is a case of lower taxes, tariffs, levies and profits.

For example, based on the latest comparative study undertaken by the department in October, Botswana, Lesotho and Swaziland paid more for their petrol than we did.

At that time the landed cost of petrol in South Africa was 115,442c/litre, noticeably cheaper than in Botswana (142,074), Lesotho (128,019) and Swaziland (131,843).

But added to the basic price before it is sold to motorists are various costs including the profit service stations make, the wholesale margin (the profit the oil companies make), transport costs, a road accident fund levy (the fund is used to cover claims by people injured or killed in road accidents), and fuel and sales taxes.

These all differ from country to country.

In October last year, South Africans were taxed 90,6c/litre on 93 octane while Botswana's motorists were taxed only 14,64c, Lesotho motorists 20,9c, Namibian motorists 62c and Swaziland's drivers coughed up 56,3c.

The tax in South Africa boosts the government's coffers by more than R10-billion a year - money that would have to come from elsewhere if fuel taxes were lower.

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