Want to share your content on R-bloggers? click here if you have a blog, or here if you don't.

According to the Automobile Association (AA) the fuel price is the sum of four main components:

• the basic fuel price
• the general fuel levy
• the Road Accident Fund (RAF) levy and
• wholesale and retail margins, distribution and transport costs.

This article suggests that almost 70% of the fuel price in South Africa is due to taxes and levies.

I used data from {saffer} to examine this assertion.

## Fuel Price Data

library(saffer)

These are the two datasets that I’ll be using:

• fuel_price and
• fuel_price_basic.

Let’s take a quick look at their contents. The fuel_price data frame contains the effective fuel price (what you’d pay as a consumer), broken down by date, fuel type and region.

fuel_price
# A tibble: 2,918 x 7
year month   day date       region  fuel  price

1  1990 Sep       4 1990-09-04 coastal 97      123
2  1990 Sep       4 1990-09-04 coastal 93      119
3  1990 Sep       4 1990-09-04 inland  93      128
4  1990 Oct      20 1990-10-20 coastal 97      155
5  1990 Oct      20 1990-10-20 coastal 93      151
6  1990 Oct      20 1990-10-20 inland  93      160
7  1990 Nov      12 1990-11-12 coastal 97      140
8  1990 Nov      12 1990-11-12 coastal 93      136
9  1990 Nov      12 1990-11-12 inland  93      145
10  1990 Dec      21 1990-12-21 coastal 97      130
# … with 2,908 more rows

The fuel_price_basic data frame contains the basic fuel price, also broken down by date and fuel type.

fuel_price_basic
# A tibble: 2,233 x 4
year month fuel                  price

1  1986 Jan   87                     55.0
2  1986 Jan   93                     57.6
3  1986 Jan   97                     63.2
4  1986 Jan   Diesel 0.5%            53.3
5  1986 Jan   Illuminating Paraffin  59.0
6  1986 Feb   87                     43.4
7  1986 Feb   93                     45.7
8  1986 Feb   97                     50.4
9  1986 Feb   Diesel 0.5%            43.9
10  1986 Feb   Illuminating Paraffin  49.7
# … with 2,223 more rows

I merged these two sets of data and then filtered out the records for 95 ULP since it has the longest history.

## Plots

Here’s how the price of 95 ULP has changed over recent decades, decomposed into contributions from the basic fuel price and other costs.

Although the basic fuel price has been fairly volatile, changing as a function of exchange rate and crude oil price, the other costs has increased systematically.

The plot below shows the relative contributions of these two components to the total cost of 95 ULP.

95 ULP was only available at the coast up until December 2005, after which it was only available inland. The figures above represent the price of 95 ULP under both regimes.

It looks like the basic fuel price has hovered at around 50% of the total fuel price. However, recently, the contribution from other costs is higher than that from the basic fuel price. In January 2021 the basic fuel price made up only 34.9 % of the total fuel price.

The figure below shows the distribution of the basic fuel price as a proportion of the total fuel price. The vertical dashed line is the average proportion.

## Conclusion

Historically the basic fuel price has contributed around 50% of the price of fuel. However, at present other costs are dominating the fuel price.