Fuel has been a crisis many times in the history of South Africa and now there are multiple crises!The country will have to import about 2-billion litres a year of petrol and 7-billion litres a year of distillates, which included diesel and jet fuel, by 2016 if it did not invest in additional refining capacity, according to Engen’s corporate planning GM, Dave Wright. That would equate to about 14 per cent of petrol requirements and 34 per cent of distillates at that time, compared to the current importation of about 3 per cent of petrol and 5 per cent of distillates.
However, if two planned refinery projects reach fruition then there would be excess capacity. Wright noted that both refineries were geared towards distillate production and that he expected SA to become a diesel-driven economy, as opposed to the current situation where it was petrol driven.
Meanwhile, Sasol has applied to the National Energy Regulator (NERSA) to increase its fuel storage capacity at its Alrode terminal, in Alberton by more than three fold at a cost of R820-million. This would increase spare storage capapcity from 2 and a half days to 10 days.
According to the company’s manager in charge of expansion the petro-chemicals group also wanted to build additional storage in Pretoria, Polokwane, Klerksdorp, Nelspruit and Durban.
Among the reasons for the need for more storage capacity was the fact that there were now more than 600 Sasol filling stations after the company opened its first one in 2004.
Meanwhile, there is a storm around the motor manufacturers’ need for fuel refineries to be upgraded to meet Euro 4 standards by 2014. Sasol’s energy cluster executive director, Benny Mokaba, says this will cost the country’s fuel refiners R40-billion. He added that reaching Euro 5 requirements will be even more expensive. Mokaba has subsequently called for brakes to be put on the implementation of cleaner fuel specifications.
Mokaba said SA’s energy policy had been disjointed and there was a lack of energy policy integration.
“We have fiddled around as a country. Coherence is lacking,” he added.
Another bone of contention is the new, 555-km multi fuel pipeline being built between Durban and Heidelberg, in Gauteng. According to BP’s CE, Sipho Maseko it will be the most expensive in the world, costing double that of the trans-Alaska pipeline.
The latest cost estimate is R12,7-billion and it is due for completion in December 2011. It will be a 24-inch pipe, which is double the diameter of the current pipeline. It is claimed it will result in a 60 per cent drop in the number of tankers transporting fuel between KZN and Gauteng, going down from 111 tankers to 55.
However, the big gripe is about the fact that a 300 per cent tariff increase will be used to fund the project. This means Gauteng motorists will pay an additional levy of 39c for each litre of petrol over the next two years.
Meanwhile, Toyota SA finds it “inconceivable that the introduction of an ad-valorem duty based on CO2 emissions is being considered while we are being deprived of the latest fuel technologies that are aimed at addressing that very issue”.
“While we are able to take advantage of some of this technology in South Africa we are deprived of adopting it in its entirety because our fuels do not comply with the minimum specification required,” Toyota SA chief executive Johan van Zyl said.
“The technology is available to us – we deliver it in our export vehicles – but we are being forced into a situation where our domestic customers will be artificially penalised because of intransigence on the part of the oil industry.
“We would appeal to government to delay any introduction of a punitive emission’s based ad-valorem duty until such time as we have access to latest generation fuels. We would also appeal to government to apply pressure on the fuels industry to ensure the earliest possible adoption of new fuel specifications,” he added.
Dr Van Zyl concluded by stating that Toyota was not against the introduction of an emissions based ad valorem duty.
“We believe that this is the right way to go with the adoption of at least Euro Step IV specifications,” he said.