ILLEGAL FUEL SALE
Rising oil price pushes up cost of replacing crude sold illegally by SFF
If the state-owned Strategic Fuel Fund (SFF) had wanted to use the proceeds of the illegal sale of 10.3-million barrels of crude oil made in December 2015 to buy back the oil, it would have only had enough money to pay for 4-million barrels at the oil price that prevailed at end-March.
The 10.3-million barrels were sold to Nigerian firm Taleveras, Swiss firm Glencore and Dutch firm Vitol without the required authorisation of Treasury. At the time the oil price was much lower than now.
The crude oil was sold at a big discount to the prevailing spot price. It was sold at an average price of $28 a barrel at a time when the Brent oil price ranged between $37.22 and $44.44 a barrel.
The Brent crude oil price in March was about $66 and is currently over $80.
The SFF, whose role is to procure and store fuels on behalf of SA, and its parent company, the Central Energy Fund, have applied to the High Court in Cape Town to have the sale annulled on the grounds that it was unlawful, invalid and unconstitutional. The buyers of the oil are opposing this.