Basic Fuel Price

The import-parity calculation forming the foundation of the gazetted pump price, before levies, distribution costs and regulated margins.

Benchmark Service Station

The notional station modelled under the Regulatory Accounting System to derive the retail margin: 233 000 litres of petrol a month, roughly R9.5 million to build and R3.6 million a year to operate.

Cash break-even

The throughput at which fuel and non-fuel gross profit together cover operating costs and full debt service. Calculated separately for each year against that year’s own cost base.

DMPR

The Department of Mineral and Petroleum Resources, which gazettes the pump price monthly and issues site and retail licences under the Petroleum Products Act.

Forecourt controller

The system linking the dispensers to the point of sale, authorising fuel draws and recording meter readings for wet stock reconciliation.

NEMA

The National Environmental Management Act. Underground fuel storage triggers listed activities requiring environmental authorisation before construction.

Pricing zone

The geographic area for which a specific pump price is gazetted. Primary distribution zone differentials run from 2.9 to 128.6 cents a litre depending on inland location.

RAS

The Regulatory Accounting System, which determines the retail margin for petrol by modelling a benchmark service station and deriving the margin required to deliver a fair return on it. The margin is split between landlord, oil company and retailer.

Resale price maintenance

The rule prohibiting retailers from discounting petrol below the gazetted pump price. Diesel is not subject to it, which is why fleet discounting erodes the diesel margin.

RORO

Retailer-owned, retailer-operated. The freehold structure modelled here, in which the operator retains the whole retail margin rather than paying a share away as rent.

Ullage

The unfilled capacity in a fuel tank. Deliveries scheduled against ullage minimise both stockouts and working capital tied up in product.

Wet stock variance

The difference between fuel dipped in the tanks and fuel accounted for through meters and sales. Investigated at 0.3% of throughput; a persistent 0.5% loss costs R649 440 a year at cost.