LETTER: Lack of strategic reserve of refined fuels our Achilles heel

In 2005, after SA suffered a diesel shortage, the Moerane commission made strategic recommendations regarding refined fuels. While there is a strategic oil reserve in Saldanha, refined fuels including petrol, diesel and jet fuel were and still are imported by the oil companies on a commercial, not strategic, basis.

The Moerane recommendations were not implemented. The Saldanha oil reserve represents something of a false security as it can only be processed at Sasol’s Secunda plant, all our other refineries having been closed. There is still no strategic reserve of refined fuels.

This became important last week when the department of public enterprises, via PetroSA, “found” 50-million litres of diesel for Eskom, which had no budget to order more (“Eskom gets diesel lifeline — but still no funding”, November 23). The most recent consignment had been offloaded later than expected in Mossel Bay, resulting in Eskom maintaining higher levels of load-shedding. As PetroSA lacks its own stocks, the 50-million litres was probably extracted from commercial importers.

As Moerane emphasised in his report, diesel is critical for the SA economy. The planting season continues in the maize production areas, hundreds of heavy transport trucks supply Gauteng from the Cape Town, Ngqura and Durban harbours, private gensets sustain businesses during load-shedding, and diesel engine cars remain popular.

Current international supplies of diesel appear adequate, but the European energy position is uncertain and Ukraine will need additional diesel to power generators. SA simply cannot afford to run out; it requires strategic stocks.

I hope the panic decision to buy up 50-million litres to keep load-shedding down in the crucial weeks running up to the ANC elective conference does not have unforeseen catastrophic economic consequences as we begin 2023.

James Cunningham
Camps Bay

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.