The price of petroleum fuel in South Africa is fixed by the Department of Energy. Because of the short-term fluctuations in the price of crude oil and the exchange rate of the rand, this exercise is carried out monthly. The retail price of petrol is fixed, while, in the case of diesel fuel, the wholesale price is prescribed, and the retailers are at liberty to fix the retail price themselves.
The country was divided up into zones and, to allow for transport costs, the retail price of petrol and the wholesale price of diesel are fixed per zone. Caledon and Hermanus both fall into Zone 05A and Bredasdorp is in Zone 06A.
The October 2018 wholesale price for 50 ppm (parts per million) diesel is 1538,63 cents per litre for Zone 05A and 1550,03 cents per litre for Zone 06A. The wholesale price for 50 ppm diesel applicable to filling stations in both Hermanus and Bredasdorp is therefore the same, viz R15,3863/l. There is very little difference in the distance from Cape Town/Milnerton to Caledon and Hermanus and it can therefore be assumed that the cost to transport the bulk fuel to Caledon and Hermanus should be approximately the same.
Why then can I buy 50 ppm diesel fuel in Caledon at R16.03 per litre, while the filling stations in Onrus and Hermanus charge R16.88, R16.87, R16.83, R16.90, R16.70 and R16.84 respectively for the same product? An average difference of 80c per litre! It costs between R40.20 and R52.20 more to fill a 60-litre tank in Hermanus than in Caledon! I did not check the current price in Bredasdorp, but a year or two ago the diesel price there was also lower than in Hermanus in spite of the extra 70 km from the refinery. I am told that the price in Villiersdorp is currently R16.07/l.
Price fixing is a serious offence and can have devastating consequences. Because there is a difference, however slight, between the diesel prices charged by the local filling stations, one cannot suspect that this is what is taking place here and that is not what I allege. And maybe there are circumstances of which I am not aware that can explain the higher local prices. Nevertheless, this is a matter that deserves further investigation and I hope that the local Chamber of Commerce will take the matter further. Maybe the situation should in any event be investigated by the Competition Commission of South Africa.