Page 20 - DMEA Week 21 2020

DMEA FUELS DMEA
South Africa rations diesel amid quick demand recovery
SOUTH AFRICA
Only two of the country’s six refineries are working properly.
SOUTH Africa has begun rationing diesel after demand recovered more quickly that had been expected after the country eased its COVID-19 lockdown.
Amid the lockdown, which began on May 27, South Africa closed more than half its refining capacity. Rules started to be eased this month, with some industries allowed to reopen.
“The opening of the economy has resulted in a more rapid recovery than expected,” the South African Petroleum Industry Association (SAPIA) said in a statement on May 26. “Stock rationing has been implemented to manage demand and to preserve supplies, and is expected to continue to the end of May.”
South Africa’s diesel stockpiles are running low, its Department of Mineral Resources and Energy told Bloomberg on May 27. There are no shortages of gasoline, however, according to SAPIA.
South Afrcia has six refineries but only two – the Secunda and PetroSA plants in Mossel Bay – are currently online.
The Engen Durban refinery, the country’s
largest and operated by BP and Royal Dutch Shell, was closed on March 27 “due to forecast lower demand for petroleum products during the national lockdown.”
Engen and the Sapref refinery “are currently starting up with on spec production expected by this weekend,” SAPIA said.
The Natref refinery in Sasolburg was closed down by South Africa’s Sasol on April 9 and “is expected to be back online mid-June.” Cape Town’s Astron Energy refinery is “on a planned maintenance shutdown and expected back online in July.”
DA shadow minister for minerals and energy Kevin Mileham has warned that diesel shortages could go on for much longer than mid-June. He said the country’s strategic fuel reserves were not sufficient, owing to mismanagement and unclear policies.
“Given the lengthy lead time to procure, ship, offload and distribute fuel stock, it makes sense to hold sufficient reserves in the country to off- set any potential supply chain interruptions,” he said. ™
Sasol denies plan to sell fuel retail network
SOUTH AFRICA
Reports claimed it was selling the business to the state-owned Central Energy Fund.
SOUTH African energy and chemicals group Sasol has denied reports that it is looking to sell its 410-strong chain of filling stations.
Reports in the local press claimed the com- pany was negotiating the sale of its fuel retail operations to the state-owned Central Energy Fund (CEF). The business, which accounts for 11% of the country’s regulated retail market, has comeundersignificantstrainsinceSouthAfrica imposed a lockdown on May 27, causing fuel demand to plummet.
“Sasol is not divesting its downstream fuel retail business as part of its ongoing asset dis- posal process,” Sasol said in a statement on May 26.
Rather, the company is looking to grow its fuel retail presence in the country, it said.
“Here, our focus remains on improving mar- gins by looking for higher value markets for our existing production of fuels. This means both
organic retail growth, by increasing our retail site development and conversion of sites to the Sasol brand, and possible small-scale acquisi- tions,” Sasol CFO Paul Victor said. “Although we are regularly approached by interested parties to acquire or partner with us in the retail network space, we are not in discussions with any such parties to divest or partner in our downstream fuelretailbusiness.”
Sasol faces “short-term challenges,” but its business “is fundamentally robust and we have a clear pathway to resume value creation,” Victor concluded.
CEF has also dismissed the reports, which it described as “malicious” and “bordering on sensational.”
“At no stage did the CEF Board nor its chair- person Dr Mnyande publicly announce that it is negotiating with Sasol to buy its petrol stations,” CEF said. ™
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