GASPET is a wholesale petroleum supplier to the South African market. In this article we will unpack important aspects within the industry. Specifically exploring the commonly used terminologies when dealing with a wholesale petroleum supplier in South Africa.
The following terms will be explored
- Rebates
- Transport Costs
- Split Loads
- Grid Changes
REBATES
A rebate is the amount of discount allowed by the petroleum wholesaler in the South African landscape. Grid prices are regulated and ultimately determined by the Department of Energy monthly. The wholesaler purchase at a price below the grid price, thereafter, it is the supplier’s choice to sell at any price below or above grid price.
Rebates are determined by the volumes distributed on a single delivery to one particular customer, however, the combined monthly volume plays an integral part in the overall discount. These discounted rates are influenced by the transport cost of the product, and includes the equipment supplied by the wholesaler.
Understandably, regular loads will trump lesser deliveries throughout any given month. For instance, full loads (39000 L to 42000 L) are delivered to a specific site on a regular basis, the rebates allowed will be more than the rebates allowed on a 20000 L delivery once a week.
How Rebates work
Rebates are not paid back to the client in terms of monetary refund but rather, a discounted rate that is deducted from the wholesaler grid price. This is seen as a fixed price that is invoiced after the product is delivered.
For example, if the wholesaler allows 50c rebate, you will be invoiced 50c below the wholesale grid price. Zone 9C grid price being R25.74 in November 2022, you will be invoiced R25.24.
TRANSPORT COSTS
Transport cost is the cost of transport from the gantry (loading points) to the client. For example, when a product is loaded at Sasol Natref in Sasolburg, the transport cost will be calculated from Sasol to the client and back.
Transport cost is influenced by the following components:
- Truck cost
- Truck Maintenance cost
- Diesel cost for the truck
- Driver salary
- Truck license fees
- Regulatory compliance costs
How transport cost influence fuel price
Transport cost influence the cost of product more than any other cost. Currently the transportation of fuel will cost between R25/km and R30/km. The further the client is from the closest gantry, believably, the more the transport cost will be. Transport cost is determined by the amount of product transported, along with the actual distance to the operating site, to complete the delivery.
Grid changes also now negatively influence buyers in Limpopo and Northern parts of Mpumalanga. Due to limited options of loading points (gantries) for wholesalers in these areas, the transport cost from inland gantries exceeds the grid changes to these areas, which limits the wholesalers on the amount of rebates they can give.
GRID CHANGES
Due to the transport cost of fuel, the Department of Energy determines a cost of transportation, and subsequently adds it to the Wholesale Grid Price for every area in South Africa.
Coastal areas are classified as Zone 1A, whereas inland areas are classified as Zone 9C. There is a 65c difference in the price per litre of diesel on the Wholesale Grid Price between Zone 1A and Zone 9C, where Zone 1A is lower than Zone 9C.
When the wholesaler is loading in Durban and transporting to Gauteng, the grid change will be 65c. This grid changes also include transport cost.
At the current price of fuel, it is impossible for wholesalers to benefit from the grid change since the transport rate will work out from 69c per litre to 77c per litre to transport the fuel from Durban gantry. While previous transporters were willing to transport fuel from Durban to Gauteng for around 50cpl, which gave the wholesalers a benefit in buying from coastal gantries.
SPLIT LOADS
Most Fuel tankers are divided into compartments of 6000 litres. These compartments are sealed and can be opened individually by bottom valves for loading and offloading. The product in these compartments will not contaminate with another fuel product. Therefore, it allows for two or more different fuel products to be loaded in 1 tanker.
Consequently, filling stations that sell multiple products can load unleaded petrol (ULP)93, ULP95 and Diesel 50ppm on 1 truck.
As a trusted bulk petroleum supplier, GASPET aims to provide business solutions to its clients and partners, keeping them informed about changes and alternations within the petroleum industry. GASPET Fuelled for Growth. Visit the following link for more information about GASPET’s products, services, and how to get in touch https://gaspet.co.za/