SA fuel distributors diversify imports as Gulf disruptions drive diesel price pressure

Mineral and Petroleum Resources Minister Gwede Mantashe has reiterated his assurance that South Africa is not facing fuel shortages as a result of the volatile situation in the Middle East and the on-again-off-again reopening of the Strait of Hormuz.

However, when it comes to rising fuel prices, Finance Minister Enoch Godongwana has made it clear that government simply doesn’t have the money to keep supporting lower prices for long in the form of the reduced fuel levy.

At the beginning of April, government cut the levy by R3 per litre to ease pressure on consumers. The relief measure costs about R6 billion a month and is due to end on 5 May, when another significant fuel price increase is expected.

Stephen Grootes talks to the CEO of the Fuels Industry Association of SA (FIASA), Avhapfani (Fani) Tshifularo.

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While South Africa gets only around 18% of its fuel imports from the Gulf, the uncertainty around supply from this region has forced distributors to find alternative sources.

"The supply sources have changed in the last six weeks or so... Currently, based on the information from our members, it is clear that they've replaced the Arab Gulf mainly with products coming from northwest Europe, the west coast of India, and West Africa."

Some FIASA members are also getting some of their product from the US Gulf Coast, Tshifularo says.

While it has not been easy, they have been able to survive and continue supplying South Africa's needs in terms of petrol, diesel and kerosene, he goes on.

The cost implications for importers is of course trickling down to the consumer.

Not only is the price of the product rocketing, but they'e faced with higher freight costs.

"It all means that we are landing products in the country at a higher cost than before. Freight costs are one challenge - for now, if you can really match the price that the market requires, then you will be able to land product into SA."

Scroll up to the audio player to listen to the full conversation with the FIASA CEO