Cape Town – South Africa’s diesel shortage was sparked by the slow opening up of the economy following the Covid-19 Alert level 5 lockdown.
Durban refineries Engen and Sapref are expected to start up production this weekend.
However, motorists driving petrol-powered vehicles also need not worry about any looming petrol shortages due to the recent lag in national refinery production.
This was the word from the SA Petroleum Industry Association (Sapia) yesterday following concerns raised in a parliamentary portfolio committee meeting this week that the country was “rationing” its diesel supply after the sector experienced a demand slump due to the Covid-19 lockdown.
The DA’s spokesperson for mineral resources and energy, Kevin Mileham, called on Minister of Mineral Resources and Energy Gwede Mantashe to inform the country of the challenges facing the petroleum sector as the economy gradually reopened from June1.
“According to information received from the SA Petroleum Industry Alliance and others, South Africa faces a shortage of diesel over the next few weeks. The increase in economic activity has absorbed the surplus that was on hand at the start of the lockdown,” Mileham said.
He added that he had asked a question about the diesel shortage at a joint minerals and energy parliamentary portfolio committee meeting held online on Tuesday, at which the deputy director-general for petroleum and petroleum products regulation, Tseliso Maqubela, had confirmed that diesel was currently being rationed.
“Minimal refining capacity is online, and there is very limited imported stock arriving on our shores.
“As at the end of last week, three of South Africa’s six refineries had yet to restart operations, two were in limited production, and the PetroSA facility had halted production temporarily due to product contamination and pipeline failures.
“This means that diesel is likely to be rationed for the foreseeable future,” Mileham said.
He said that the country’s strategic fuel reserves were not able to meet demand, primarily due to mismanagement, the lack of clear policy and politics.
“Given the lengthy lead time to procure, ship, offload and distribute fuel stock, it makes sense to hold sufficient reserves in the country to offset any potential supply chain interruptions,” he said.
He added that the 2013 Draft Strategic Fuel Stocks Policy, which had not been adopted, aimed to ensure the uninterrupted supply of petroleum products countrywide.
“At that time, it was estimated that fuel supply shortages would cost South Africa R1billion a day in lost economic opportunities,” Mileham said.
One of the requirements of the policy was that, over and above the stocks held directly by the government, licensed manufacturers and wholesalers would be obliged to hold 14 days of refined product as strategic stocks.
Sapia executive director Avhapfani Tshifularo said yesterday that the diesel shortage would definitely be over by the end of May, as the two Durban refineries were starting up.
“PetroSA and Secunda are online. The two Durban refineries, Engen and Sapref, are currently starting up and on-spec production is expected by this weekend,” Tshifularo said.
“Natref and Astron Energy are currently shut down. They are expected to start up in mid-June and the beginning of July respectively,” he said.
Tshifularo said a contributing factor to the diesel shortage had been unplanned shutdowns.
“While the industry does have contingency plans to allow for planned and unplanned shutdowns, the demand for diesel was higher than expected with the move from Alert Level 5 to Alert Level 4,” he said.
Tshifularo said there was sufficient supply of petrol as demand had declined 60% during lockdown.
“The demand for petrol since the opening of the economy has not increased as dramatically as it has for diesel. The current inadequate fuel stock is specific to diesel,” he said.
He said refineries rationed stock by providing customers with between 50% or 80% of their orders to ensure that all customers received supplies.
“There are no official reserves or strategic stock of diesel. Strategic stocks are nominally held in crude oil. Companies generally hold sufficient stock to service their individual market requirements,” he said.
Tshifularo said Department of Mineral Resources and Energy data showed that the country consumed 12.9billion litres of diesel per annum, of which between 60% and 70% is locally produced and the balance imported.
Sapref Refinery spokesperson Mpume Mbambo said the refinery had been “successfully restarted” and that it was producing fuels “as per our customers’ (Shell and BP) requirements”.
“Sapref is unaware of any diesel shortage as we are meeting our customer demands. Sapref is not party to any rationing process,” Mbambo said.
“The demand for our products by our customers, as anticipated, reduced substantially during the lockdown period.
“Sapref made the decision to utilise this period of low demand to perform maintenance repairs,” Mbambo said.
“We are staffed to safely and reliably operate the refinery while adhering to the Covid-19 health and safety requirements,” Mbambo said.
Engen and Natref refineries had not responded to questions by publication deadline, nor had the Department of Mineral Resources and Energy.