Petrol body calls for oil supply solutions

SOUTH Africa’s oil industry is in urgent need of investment to ensure the continued supply of fuel, a petroleum industry director said on Friday.

Peter Noke, the national director of the South African Petroleum Retailers’ Association, said there was a need for a joint partnership to be established between the state and private enterprise to secure the country’s oil supply.
‘The frequent shortage in the supply of fuel to service stations and the non-delivery by oil companies points to only one thing – insufficient stock holding and poor planning,’ Noke said.
‘What we need is a constant supply of crude and fuel to ensure a successful economy. Once the industry is stable the state could withdraw systematically from the partnership, paving the way for local and BEE investment.’
Noke said oil companies were concerned about the consequences of the government’s investment in PetroSA at Coega outside of Port Elizabeth.
‘They seem to fear that if a major 400 000 barrels-a-day refinery comes on stream, their refineries will no longer be profitable and could face shut-down.’
Noke said there needed to be a correct balance between private enterprise and state investment in the industry.
Sufficient returns should ensure that oil companies re-invest in additional refining capacity, he said. None had done this in South Africa as the costs of the upgrading of existing refineries to produce clean fuels would be astronomical.
‘The question is can South Africa afford to provide the required returns or must the state intervene?
‘We need foreign investment, but we also need it responsibly. In this regard a joint partnership between the government – which could stimulate investment – and private enterprise could prove beneficial to the country.’
Noke said it was important to monitor a recommendation in the 2005 Moerane Commission that oil companies be accountable for at least 26 days worth of stock, including the time taken to get crude oil to the refinery.
-Nampa-Sapa