The Department of Mineral Resources and Energy (DMRE) yesterday confirmed that non-compliance with the Petroleum Products Act (PPA) was rampant in the country’s fuel retailing sector. Picture: Karen Sandison/African News Agency (ANA)
The Department of Mineral Resources and Energy (DMRE) yesterday confirmed that non-compliance with the Petroleum Products Act (PPA) was rampant in the country’s fuel retailing sector. Picture: Karen Sandison/African News Agency (ANA)

Illegal fuel retail is a problem - DMRE

By Given Majola Time of article published Feb 18, 2021

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DURBAN - The Department of Mineral Resources and Energy (DMRE) yesterday confirmed that non-compliance with the Petroleum Products Act (PPA) was rampant in the country’s fuel retailing sector, but it was collaborating with petroleum industry stakeholders to enforce the law.

The Fuel Retailers Association of Southern Africa (FRA) has said that it was seeing an alarming growth in illegal fuel trading, which was impacting fuel retailers, already struggling with the disruption caused by Covid-19.

The department said it had received reports of non-compliance with the PPA or of illegal and illicit fuel trading that manifested in various forms, including some wholesalers operating as retailers (dual operations), sites being developed without a licence and/or operating without a licence, the sale of inferior-quality petrol and diesel, the sale of ULP 93 at the price of ULP 95 to unsuspecting retailers and motorists (particularly in outlying areas), and the non-disclosure of fuel storage facilities.

“Yes, the department can confirm that there has been wholesalers involved in dual operations. The Petroleum Products Act provides for prohibition of certain activities (section 2A), appointment of inspectors and regional controllers of petroleum products (section 3(1) paragraphs (a) and (b)); and offences and penalties (section 12(1)),” it said.

The PPA aims to prohibit vertical integration in the sector to facilitate an environment conducive for sustainable presence ownership and control by historically disadvantaged South Africans as espoused in the Energy Policy White Paper and effected through the Petroleum and Liquid Fuels Charter that was signed and adopted in 2000.

The DMRE said it was doing something about non-compliance.

“Firstly, the Department Annual Performance Plan conducted 1 500 random inspections and 1 080 fuel sampling and testing. The majority of this are informed by complaints received from the public.

“Secondly, section 2(A)(2)(a) of the PPA provides for Issuance of Notice if a person engages in an activity in contravention of subsection (1). The Controller of Petroleum Products must by written notice direct that person to cease such activity forthwith.”

The DMRE said anyone who contravened the Act was guilty of an offence and was liable on conviction to a fine not exceeding R1 million, or to imprisonment for a period not exceeding 10 years, or both, provided that if a directive issued in terms of section 2A(2)(c) or (3) was complied with within the period specified therein, the person concerned shall be absolved from criminal liability.

The DMRE said the rampant illegal and illicit fuel trade had also prompted the need to collaborate with petroleum industry stakeholders, including South African Revenue Service, SAPS, and wholesaler and retailer associations to create a public policing forum to enforce the PPA.

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