Retail petrol industry in South Africa
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Date
2010
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Abstract
The petroleum industry has attracted a lot of attention in recent years. The industry is one of the
major contributors to the South African GDP. In recent years, increases in petrol price created a
huge challenge for the service station retailers to run sustainable, profitable and viable businesses,
as the price increases impacted negatively on sales volumes.
The new entrants in the market and new competition from other retail businesses necessitated
changes in the industry. The petroleum industry introduced new business centres at the service
stations to generate revenue for the business to ensure profitability and viability. The proliferation
of service stations, regulated retailer margins on petrol and volume performance have all created
concerns about the survival of individual service stations.
The effects of crude oil price fluctuations on the economy ultimately affect the motorists and
retailers. The South African petrol price largely depends on international market conditions. The
industry faces change and challenges. The future uncertainty of the supply of exhaustible resources
like crude oil impacts on the crude price experienced by the global market. The energy demand
thus exerts another pressure on price as the world economy grows rapidly. The uncertainty about
whether to deregulate the liquid fuel industry adds a new dimension to the industry’s future.
The study focus area highlights findings which can be extrapolated to other similar cities in South
Africa. At the end of the day, a retail operator should know the businesses very well as the profit
margins are fixed.
Description
A dissertation submitted in fulfillment of the
Degree of M.Com. in Economics, 2010.
Keywords
Petrol indusrty