Fuel industry panics over supply woes

Picture: Candice Chaplin

Picture: Candice Chaplin

Published Feb 2, 2012

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The fuel industry says it is taking steps to avoid serious fuel shortages, while retailers say they are running dry.

“The situation has not improved,” said Fuel Retailers’ Association CEO Reggie Sibiya, who represents filling station owners. “We are still getting retailers reporting not having the product.”

Retailers rely on the suppliers for restocking, and this “depends on whether you are a priority in the eyes of the suppliers”.

“Supply is definitely not meeting demand. Hundreds of service stations are running out, and the problem is mainly in Gauteng.”

The shortages have been blamed on the ongoing unplanned shutdown earlier this year at the SA Petroleum Refineries (Sapref) crude oil refinery in Durban.

Sapref is owned jointly by Shell South Africa and BP Southern Africa. Shell is rationing customers.

“Our contingency measures include procuring cargoes of refined product for import into South Africa and co-ordinating efforts with other petroleum suppliers to supplement product shortfalls,” said Shell spokesman Elton Fortuin.

“Given this situation, we are operating under a heavily rationed position for our customers across the country, and our retail sites are at risk of intermittent stock-outs on certain fuel grades during this period.”

Fortuin said the stock situation at the depots was reviewed daily.

“This includes assessing what stock is coming in, what orders we have and the outlook for the coming weeks. We then review the urgency of various orders and prioritise as such.

“In a rationed environment, we want to make sure we minimise customer run-drys, but also need to avoid stock-building so that we get as much product as possible to as many customers.”

BP expects improvements in supply soon.

“Sapref has now restarted its operations,” said BP spokeswoman Glenda Zvenyika.

“While it will take a few days to start producing fuel products at full capacity, our logistics team has been and will continue to do all that’s possible to keep our fuel stations supplied with fuel as best as possible under the circumstances until the supply situation resumes back to normal.”

The Sa Petroleum Industry Association (Sapia) said the government and the industry were addressing the security of fuel supply.

“A petroleum products logistics planning team, which comprises the petroleum industry, the National Energy Regulator of SA (Nersa), the Department of Energy and pipeline owners Transnet, is meeting on a regular basis to assess the situation and implement measures to minimise supply disruptions,” said Sapia executive director Avhapfani Tshifularo.

“We wish to assure the public that our key focus is to mitigate any impact on supply disruptions by ensuring fuel distribution to all regions.”

Sapia represents companies such as BP, Chevron, Engen, PetroSA, Sasol, Shell and Total.

Sapref is the biggest refinery in SA, dealing with more than a third of the country’s crude-oil throughput.

“We process 24 000 tons of crude per day and make 10 main products in 46 different grades. We produce 2.7 billion litres of petrol per year, which is enough fuel to take 800 000 cars around the world,” notes the Sapref website.

Sapref’s products include petrol, diesel, jet fuel, paraffin and bitumen.

Sapref also manages the single-buoy mooring (SBM) off the Durban coast, where tankers offload the crude oil imports.

Nearly 80 percent of SA’s crude oil is imported through the SBM, which recently had problems with unplanned repairs.

Sapia said the repairs to the SBM and its subsequent effect on the Sapref refinery “had compounded the tight supply situation”.

Sapref spokeswoman Margaret Rowe said the refinery would take some time to get back to full production. -The Star

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