16 years of inaction puts South Africa at severe risk of fuel shortages

Issued by Kevin Mileham MP – DA Shadow Minister of Mineral Resources and Energy
24 Oct 2022 in News

Please find English and Afrikaans soundbites by Kevin Mileham MP.

Since the release of the Moerane Commission of Inquiry Report into the fuel crisis that occurred in South Africa November/December 2005, the ANC government has failed to implement the strategic refined fuel reserves recommendation, placing the country at severe risk of fuel shortages should there be a major disruption in the fuel supply chain.

Following the just ended Transnet strike, which saw major disruptions to ports and transport networks, fuel industry players have warned that South Africa is perilously close to a major fuel supply crisis due to the unavailability of refined fuel stocks.

The DA will be submitting an urgent question to Energy Minister Gwede Mantashe (see attached) to inform the country about the status of South Africa’s fuel reserves. We will further seek to ensure that he provides us with any documentation detailing any action plans that were taken by the Department, since 2006, to effect the implementation of the strategic refined fuel reserve recommendation by the Moerane Commission.

In 2006, the then Minister of Minerals and Energy, Buyelwa Sonjica, appointed a 11 member panel, headed by Advocate Marumo Moerane, to review the circumstances that resulted in fuel supply shortages in November/December 2005. The panel’s terms of reference were to “establish the causes of the fuel supply shortages, formulate and present recommendations to the Minister, which will enable the government and other stakeholders to take appropriate steps to prevent a recurrence of the fuel crisis.”

Having established that the country does not hold strategic refined product inventories, the Commission recommended that the government should review its policy on strategic fuel stocks. Through public/private partnerships, the Commission advised that oil companies and the synthetic fuel plants should be obliged to hold prudent commercial levels of refined product stock. 16 years later, this has not been implemented.

Disruptions to the supply of refined liquid fuel (arising from inadequate port infrastructure, ongoing labour action, and a shortage of refining capacity) will have far reaching consequences to the economy and social order. The immediate impact will be the upending of supply chains, which will severely constrain productivity in the economy. Consumers could potentially face a food supply crisis as food wholesalers and distributors straggle to transport food stocks where they are needed.

The ANC government has had 16 years to implement the Moerane Commission findings but has essentially chosen to ignore them. They must provide immediate answers for this inaction and the steps that will be taken in the short to medium term before South Africa is forced to contend with a fuel supply crisis. Any further failure to resolve this situation will ultimately result in ANC-shedding in 2024.