‘Fuel-shedding’ caution sounded

South Africa is heading towards capacity “fuel-shedding” due to an absence of tactical fuel reserves and refineries. This is the caution from Peter Morgan, CEO of the Liquified Fuels Wholesalers Association. “You need to have tactical stocks in refineries. At the minute we do not have enough. The majority of our refineries are not functional, consisting of the Engen Durban refinery and PetroSA’s refinery in Mossel Bay,” stated Morgan. “If you have refineries you prevent a great deal of issues. If there’s a lack of fuel to take into the marketplace, you can draw from the refineries without the client understanding. You change that item when there is circulation.” He stated while there is an expense to bring a tactical refinery, there are lots of obstacles that can impact the supply chain if the nation lacks one. The scarcity of refineries suggests the nation is significantly dependent on imports, and supply line disturbances are a threat, as highlighted by the current Transnet strike that impacted operations at the Durban port. Morgan stated it was good that Transnet restored control in time and prevented a scenario where fuel was a limited resource. He stated wholesalers are typically allocated. “The oil majors run in city locations, while independent wholesalers run in the non-urban locations. This suggests the security of supply to non-urban locations is of issue. “The expense of transferring the item has actually ended up being costly. This is likewise due to the fact that of the increasing cost of diesel. This requires the wholesaler to move the expense to a seller who then discards it on the customer. “We need to go back to the drawing board, ideally within 30 days to prevent us reaching crisis levels. Market forces will identify what we do next. Lots of wholesalers are running on insolvency,” stated Morgan.
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