This week, the Portfolio Committee on Energy received a briefing on the R300 billion downstream liquid fuels sector from the Energy Department, wholesalers, and retailers in the industry. What was glaringly absent was representation of the storage sub-sector.
A number of challenges, such as artificial competition between oil companies, retailers and wholesalers, unsustainable vertical integration, the sector’s anxiety on uncertainty regarding the Regulatory Accounting System, inconsistencies in regulation of prices, overall lack of transformation were identified and debated.
Committee members were not impressed with the industry for not implementing the liquid fuels charter of 2000 whose main objective is to provide a framework for advancing the empowerment of historically disadvantaged South Africans in the liquid fuels industry. The retail and wholesale sector was also quite vocal about the bottlenecks that frustrated them in the sector.
The Energy Department also appealed to industry players to look beyond narrow business interests given the challenges facing the industry.
A call was made by the Committee that decisive steps were needed for compliance on implementation of the charter. The Committee indicated that proper measures needed to be put in place in order to achieve transformation in the sector so that new entrants were not set up for failure and are able to have full access to the industry.
The Committee called for an urgent intervention by the Energy Department in the retail sector. The feeling among the members was that the infrastructure in the retail industry was neither suitable and nor encouraging for new industry players. At the same time the department was commended for its incessant efforts in addressing the various challenges that were raised at the meeting notwithstanding resistance from certain quarters of the industry.
The Committee Chairperson, Mr Sisa Njikelana, welcomed inputs by the industry players and comments from the members and recommended further engagement on the topic. Mr Njikelana also recommended public hearings to focus on the many challenges that exist in the sector.
For media enquiries or interviews with the Chairperson, please contact:
Yoliswa Landu, Parliamentary Communication Services
Cell: 073 738 0182
Tel: 021 403 8203
E-mail: ylandu@parliament.gov.za
