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Another Fuel Shortage Looms
Unless weaknesses in the country's fuel supply are addressed urgently, another supply crisis could emerge later this year, warns the report of a probe into the shortages of liquid fuel that hit the country in December.
The report blames a "convergence of events" for the crisis, but adds: "Shortages will become a feature of the future economic environment. It is imperative that a plan be put in place with immediate effect to avoid this happening."
The report was drawn up by a task team under MTK Moerane, an advocate, and was released yesterday by minister of minerals and energy Buyelwa Sonjica.
The report blames nine different but related causes for the dramatic shortages.
First, it says, was the one-day "big bang" approach to the introduction of new fuel specifications in January.
Second, it blames the scheduling of refinery shutdowns; third, problems related to the shutdowns; fourth, the industry's low level of stocks; and fifth, an inadequate infrastructure. The regulated price decrease in December was the sixth factor and poor communication among stakeholders the seventh.
Supply and demand were tight, the report says. Finally, the change in supply dynamics between the inland areas and the coast is blamed.
The minister and director-general Sandile Nogxena said they had measures in place to avoid another crisis this year. These included two forums for monitoring what was happening in the marketplace: the fuel strategic supply task team and the liquid petroleum task team.
Sonjica agreed that one lesson was that South Africa needed another oil refinery. She said she would announce plans for this within a month. It would probably be built and run by a strategic partnership between the government and private industry.
The minister will meet the SA Petroleum Industry Association (Sapia) next week to discuss measures against the threatened shortages.
Business Report
The report was drawn up by a task team under MTK Moerane, an advocate, and was released yesterday by minister of minerals and energy Buyelwa Sonjica.
The report blames nine different but related causes for the dramatic shortages.
First, it says, was the one-day "big bang" approach to the introduction of new fuel specifications in January.
Second, it blames the scheduling of refinery shutdowns; third, problems related to the shutdowns; fourth, the industry's low level of stocks; and fifth, an inadequate infrastructure. The regulated price decrease in December was the sixth factor and poor communication among stakeholders the seventh.
Supply and demand were tight, the report says. Finally, the change in supply dynamics between the inland areas and the coast is blamed.
The minister and director-general Sandile Nogxena said they had measures in place to avoid another crisis this year. These included two forums for monitoring what was happening in the marketplace: the fuel strategic supply task team and the liquid petroleum task team.
Sonjica agreed that one lesson was that South Africa needed another oil refinery. She said she would announce plans for this within a month. It would probably be built and run by a strategic partnership between the government and private industry.
The minister will meet the SA Petroleum Industry Association (Sapia) next week to discuss measures against the threatened shortages.
Business Report
