South African motorists can expect a recurrence of last year’s fuel shortages if liquid fuels are used by large industry as a short-term solution to the electricity crisis.
“Fuel supplies are at a critical level. If the solution is to use liquid fuels then we will not be able to meet demands,” said Peter Morgan, the chief executive officer of the Fuel Retailers’ Association (FRA).
He said that supplying “a few” litres of diesel to individuals to run generators for their businesses and homes would not kill the fuel industry. “Someone bringing a 20-litre drum to a garage to be filled with petrol or diesel is not a concern.
“But, because supplies are so critical, if, in the short term, companies like the smelters in Richards Bay decide to bring in a barge with a mobile power station on it, the industry will not be able to supply the millions of litres of diesel needed. That is because the refineries are already at capacity and any additional fuel required will have to be imported.”
And no additional fuel was being imported to cater for any shortages that might arise from unplanned maintenance shutdowns or incidents such as fires at refineries.
Morgan said the fuel crisis, exacerbated by the fact that power outages at fuel depots meant petrol, diesel and gas could not be loaded for distribution, would continue for at least another five years – or until another crude oil refinery was built on the coast and the oil pipeline from Angola was installed and became operational. The new Sasol coal-to-liquid operation was only expected to become operational after 2013.
“If all the plans on the table work, then there will be no fuel problems in South Africa in 15 years time,” he said.
The heavily regulated fuel industry is struggling to cope with the heavy financial losses caused by the blackouts, and it is considering whether it should ask the government to increase its control because of some of the problems that are arising.
Morgan said the fuel industry had been concerned about limited supplies since 2005 because there was a lack of capacity to get fuel from coastal depots to inland provinces – no money had been spent on proper infrastructure development. South Africa also no longer had a strategic reserve and had to rely heavily on the import of crude oil for refining into petrol, diesel and gas.
Because of the power crisis, petrol station owners have considered installing solar panels and generators but the viability of this is being questioned.
“Because this is a very heavily regulated industry, there will be no financial return on the investment in a generator or alternative power source,” said Morgan.
“One must remember that, if a generator is installed at a service station, the owner can’t just adjust the price of fuel to recoup the cost of the investment. It is one of the very few industries that is excluded from the consumer-pays principle.”
Morgan has written to the minerals and energy department indicating that the retail fuel industry is prepared to adhere to government’s request that electricity consumption be cut by 15 percent by the industrial sector.
In the letter, the FRA suggested that turning off large signs at filling stations and switching off fridges and air-conditioning units for part of a day could be part of the solution. But this would have to be regulated and policed because some garage owners would not comply so that they could profit at the expense of others.
Another matter that also required urgent attention, he said, was the payment of petrol attendants during blackouts. Unions had demanded full pay for attendants even if they were not able to work.
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