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Answers needed to address diesel crisis

Screen Shot 2020-06-09 at 1.35.15 PM

Source: Media release by Kevin Mileham, DA shadow minister of mineral resources and energy, 9 June 2020, photo credit: Business Link

Despite unequivocal assurances from the Minister of Mineral Resources and Energy, Gwede Mantashe, and senior officials in the Department of Mineral Resources and Energy, diesel remains in short supply across the length and breadth of South Africa.

When the Democratic Alliance (DA) first highlighted this issue two weeks ago, the Minister was quick to claim that the supply shortfall, which arose because a number of refineries shut down production during the lockdown, would be over by the end of May.

The DA has written to the chairperson of the portfolio committee on mineral resources and energy, requesting that an urgent meeting is convened at which the Minister be afforded an opportunity to explain what steps he is taking to mitigate the diesel crisis and address the grave implications for our economy.

Fuel wholesalers report that they have been informed by certain refineries that this situation is likely to continue until at least mid-June.

A snap poll conducted by Grain SA indicates that roughly 30% of their members are unable to obtain bulk supplies of diesel from their fuel suppliers.

This obviously has huge consequences for South Africa’s farmers, many of who are in the middle of their annual harvest season.

Another sector that is significantly affected is that of long-distance trucking – a vital component in ensuring South Africa’s food security.

As mines ramp up production, and the economy gradually opens, more demand will be placed on our limited diesel stocks, and any shortfall in supply will negatively impact the ability of businesses to restart and recover their operations.

A reply to a recent parliamentary question indicated that the Strategic Fuel Fund, the custodian of South Africa’s Strategic Fuel Reserve, has only 6 useable tanks out of 45, and only 2 of those are actually used for strategic reserves.

In addition, the Draft Strategic Stocks policy, which required that fuel wholesalers and refineries hold 14 days of refined reserves, was never enacted or enforced.

What this means is that South Africa essentially does not have any reserve that is readily accessible at short notice.

Mantashe is clearly out of touch with the reality of the situation and is unwilling to accept responsibility for ensuring continuity of supply. The DA will not permit Minister Mantashe and his department to shirk accountability for this matter.

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