Abstract
The research implements a positivist and deductive framework that uses quantitative methods to evaluate financial performance indicators. The research study collected secondary data from 41 service stations in nine provinces throughout South Africa during 2016–2024, along with wholesale depot information from Gauteng, KwaZulu-Natal, the Free State, and the Northwest.
The research study employed analytical tools to evaluate revenue and costs, break-even analysis, contribution margin calculations, and profitability metrics such as Gross Profit Margin (GPM), Net Profit Margin (NPM), Return on Investment (ROI), and Net Present Value (NPV). Regression and correlation analysis, together with time series analysis, were fundamental to model the relationships between pricing variables and financial outcomes.
The research shows that oil company service stations with fixed pricing face substantial competition from independent retailers, who have more flexibility in setting prices. The market’s deregulation and saturation led to profitability depending on price hikes and margin increases instead of sales expansion, which created sustainability challenges.