SA fuel retailers welcome SCA ruling suspending new licences, pending ministerial approval

Mineral Resources and Energy Minister Gwede Mantashe. Picture: Itumeleng English/Independent Newspapers

Mineral Resources and Energy Minister Gwede Mantashe. Picture: Itumeleng English/Independent Newspapers

Published Apr 23, 2024


The Fuel Retailers Association (FRA) has welcomed the Supreme Court of Appeal (SCA) judgment which ruled that all new fuel retail licences would be suspended until the minister of energy decided on the matter if existing licence holders were challenging their granting.

Responding to a Business Report media enquiry on Monday, FRA CEO Reggie Sibiya said appeals could take from six to 12 months, or years, as could be seen in this case where the appeal was lodged in 2021, and to date there was no outcome.

“This judgment will ensure that construction does not happen until the affected retailers have exhausted all their legal rights in opposing new to industry sites that will ultimately collapse their volumes and thus render them unviable,” Sibiya said.

“This judgment will promote the Petroleum Products Act (PPA) 2B objectives which the minister has been working against over the years, primarily section 2B(2)(a) which states the DMRE (Department of Mineral Resources and Energy) must promote an efficient retailing petroleum industry. It’s clear the mushrooming of service stations was counter-productive and was leading to a collapse in the industry.”

According to the SCA, the four appellants were holders of site and retail licences issued to them under the Petroleum Products Act 120 of 1977 (the Act) and operate three outlets in the central business district of Matatiele, where petroleum products were sold or offered for sale to customers.

These outlets were said to be near to each other.

“During May 2019 the third respondent made an application to the third respondent (the Controller) for a site licence and the fourth respondent applied for a retail licence (applications for site and retail licences) to enable them to operate an additional outlet in Matatiele,” it said.

The appellants lodged an objection against the granting of the site and retail licences to the respondents, contending that an additional retailer in Matatiele would ‘cannibalise’ the sales of the existing retailers and be contrary to the statutory requirements of efficacy and economic viability.

Despite the objection, the Controller was satisfied that the respondents’ applications met the requirements of the act and the Regulations regarding Petroleum Products Site and Retail Licences (the regulations) and informed the respondents that their applications were successful.

The Controller issued the site and retail licences to the respondents on March 8, 2021.

The FRA said it would ensure that the minister of mineral resources adhered to the legislated time frames of 90 days in adjudicating over appeals as per the SCA judgment in the Gensinger and Neave CC & Others v Minister of Department of Mineral Resources and Energy.

Sibiya said the industry should intensify the call for a review of the PPA and the promulgation of the draft retail and site licence guidelines as per the order of the High Court in 2014 which had not happened to date.

He said they hoped this court judgment would give a sense of urgency in the department in taking decisions on these critical issues that could destroy the industry.

Sibiya said this judgment ensured that all affected parties were not prejudiced and as such it was much welcomed.

The DMRE was not immediately available for comment on its next course of action on the matter.