Energy Minister Mmamoloko Kubayi File picture: Immah Ncube

Johannesburg - The Congress of South African Trade Unions (Cosatu) on Tuesday, welcomed the suspension of the entire Central Energy Fund (CEF) board members by Energy Minister Mmamoloko Kubayi over the sale of 10.3 million barrels of the country's strategic oil reserves.

''Cosatu welcomes the decision by Energy Minister Mmamoloko Kubayi and for demanding an explanation on the sale of strategic oil reserves at a discount last year. As workers, we demand answers as to why the Central Energy Fund secretly sold 10 million barrels of crude oil, close to its entire stockpile without any permission from the national Treasury and below price last year,'' said spokesman Sizwe Pamla.

''This is the kind of short sight and negligence that leaves South Africans and the economy exposed to the volatility of the market.''

According to a Business Day report on Tuesday, Kubayi suspended the board after she held a meeting with them in Pretoria last week. The suspended board members, who included chairman Luvo Makasi, acting CEO Mojalefa Moagi, chief financial officer Lufuno Makhuba and company secretary Abdul Haffejee -- had until Monday to individually respond to questions posed to them by the Kubayi.

The board and previous energy minister Tina Joemat-Pettersson came under fire for the transaction worth R5 billion without authorisation from Treasury.

Earlier this year, Kubayi confirmed to Parliament's energy committee that the fuel stocks were “sold” and not rotated as was claimed by her predecessor last year. The sale caused an outcry, partly because the stock was disposed off at the low price of 29 US dollars a barrel.

At the time, Kubayi said a forensic probe would be done to trace exactly where the money from the sale went and would also determine what losses were incurred as a result of the deal. She said criminal charges would possibly be brought against those responsible.

Pamla said that Cosatu called for visionary leadership at the CEF that will ensure they take decisions that will "cushion us from the market instability". 

"We are deeply concerned by the likely consequences of today’s rise in the price of petrol. The poor will be the hardest hit, because there will be the inevitable increases in public transport fares, the price of food and other basic essentials. This also means that many workers and students will have to pay even more to get to and from their workplaces and classes,'' said Pamla.