How petrol stations make money in South Africa’s tight-margin fuel game

Stephen Grootes speaks to Reggie Sibiya, CEO of Fuel Retailers Association about the business of fuel retail in South Africa, unpacking how petrol stations actually make money in a tightly regulated environment. 

Listen to the interview in the audio player below.

Running a petrol station in South Africa might look like a simple business. Cars pull in, fuel gets pumped, money changes hands. But behind the scenes, it’s a tightly regulated, high-volume operation where success depends on careful cost control, smart diversification and scale.

At the heart of every petrol station is fuel sales. These typically account for 80% to 90% of total turnover. But there’s a catch: retailers don’t control the price.

Fuel prices in South Africa are regulated, which means operators work on fixed margins per litre. Whether petrol prices go up or down, the margin stays largely the same.

That’s why location, traffic flow and customer throughput are critical. A busy site pumping hundreds of thousands of litres a month will outperform a quieter one, even if both operate efficiently.

Speaking to Stephen Grootes on The Money Show, CEO of the Fuel retailers association, Reggie Sibiya says making money from a service station is hard work.

"There are very few service stations that really make it. If you are actually pumping above 300,000 (litres) upwards, then that is a viable service station. You can make money there. But the majority are actually below that benchmark."

- Reggie Sibiya, CEO - Fuel retailers association

"The demand is actually very high, but the market is already saturated, as there are very few new service stations being built."

- Reggie Sibiya, CEO - Fuel retailers association

"Volumes are declining because of a number of reasons. Including efficient vehicles which are consuming much less fuel than they were 20 years ago. We then have people working from home...you then have illegal trading also."

- Reggie Sibiya, CEO - Fuel retailers association

Scroll to the top of the article to listen to the full interview.