South Africa: FUEL SUPPLY: High and dry

SA’s fuel supply infrastructure is on a knife edge. Refineries around the country are working flat out but can no longer satisfy demand. Imports are growing but the ports can’t handle the rising volumes indefinitely. The pipeline carrying fuel inland is running at capacity. The growing number of trucks on the roads is not safe, cost-efficient or environmentally desirable.

As the FM was going to press on Tuesday night, news broke of a fire at Durban’s Island View depot – a critical, already stretched facility in the overall fuel supply chain. A BP spokesman said the fire hadn’t affected the fuel storage areas of the facility, but it is an example of what SA’s fuel supply infrastructure can ill afford.

Even without any mishaps, fuel demand is outstripping supply. The minerals & energy affairs department is expecting inland shortages next year. To ensure pumps don’t run dry, the fuel industry and government urgently need to invest billions to upgrade the country’s fuel supply infrastructure. Government must act transparently and decisively as a central co-ordinator. SA’s electricity supply problems provide a clear example of what happens when government gets it wrong. Petrol and diesel could be next.

Efforts are being made by both government and industry to avoid the worst-case scenario, but neither is acting with sufficient urgency. As a result Gauteng, in particular, could face fuel shortages in the same way as the province faces constant power outages.

Government has attempted to coordinate its policy response through a recently released “Energy Security Master Plan” for the liquid fuels industry, but as yet, the industry seems unaware or unsure of government’s plans. And construction of new infrastructure should have started already.

Financial Mail (South Africa)