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Government intensifies efforts to transform petroleum sector

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Petroleum sector - [https://si.wsj.net/public/resources/images/BI-AB252_BREAKS_GR_20161110133853.jpg] Petroleum sector - [https://si.wsj.net/public/resources/images/BI-AB252_BREAKS_GR_20161110133853.jpg]

Energy Minister David Mahlobo says the department is conducting an audit that will inform interventions in the petroleum sector, which he says remained untransformed.

Answering questions at the National Council of Provinces on Tuesday, the Minister said transformation in the sector is non-negotiable and government has put in motion several interventions to change the status quo.

He said the department's aim was to achieve the objective of the Energy White Paper 1998, which calls for 25% of sustainable presence, ownership and control by previously disadvantaged South Africans in all facets of the industry of the various entities that hold the operating assets in the South African oil industry.

“The Liquid Fuels Charter compliance audit has been carried in 2010 indicates that a large proportion of the previous groups of South Africans economically active population is under-represented. And in the retail part of the value chain, despite the targets set in the charter for the petroleum sector, the representation of women is bad. It is below 10%.

“We are conducting an audit that will serve as a baseline to inform interventions required to transform the petroleum retail sector,” he said.

The Minister said the department aims to ensure that meaningful radical economic transformation is realised on the implementation of inter alia the Petroleum Products Act of 1977, as amended by the Petroleum Amendment Act of 2003, to specifically effect transformation and the Petroleum and Liquid Fuels Charter.

He said the Charter was currently being aligned to the Broad-Based Black Economic Empowerment (BBBEE) Act.

“To date, there is a realisation that the implementation of the Liquid Fuels Charter entire scope of application as agreed in 2000 did not achieve substantial increased black participation at all levels of our population across the value chain.

“Whilst acknowledging that the achievement of black ownership at 25% is unencumbered ownership of Total South Africa, Sasol … across the value chain, petrol retail and state ownership remains substantially unchanged and is below the 25% target.

“Transformation is non-negotiable. It has to happen because this sector can’t continue to benefit only a few. We are also aligning the petroleum and liquid Fuels Charter to the BEE policy framework. The public notice that was gazetted on the 13 of September 2017.

“We are envisaging that the Draft Petroleum and Liquid Fuels Sector Code … with a score card will be gazetted in terms of section 9 (5) of the Act 2003 and we are going tobe receiving the public comments before the end of the year.

Support for black-owned industry players

Meanwhile, the Minister said the department was looking at several initiatives aimed at supporting the industry’s black players.

He said, for example, that site and retail franchise agreements that expire are prioritised for black South Africans, with more bias to women and young people.

“We are also going to engage the Department of Cooperative Governance and Traditional Affairs Public Enterprises, Mineral Resources and local government to ensure that municipalities and state-owned entities and mining companies push the question of transformation of the petroleum sector.

“We will also engage the Departments of Defence, Health, Transport, Government Fleet and South African Police Services as major users because we want to use the capability of the state where the state is taking more to start buying from black people, and more importantly, from women and we also further believe that the immediate focus should be the facilitation of BEE companies by the department to enable them to import sizeable quantities of oil from West Africa Crude Oil...” 


 

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