Tag Archive | liquid fuels

Liquid fuels industry short on BEE charter

Fuel industry attacked on BEE …

On the subject of black economic empowerment  (BEE), acting director of the department of energy (DoE), Tseliso Maqubela, told Parliament, before it went into short recess, that the major target for his department was to ensure a more immediate transformation of the liquid fuels industry.   Economic transformation in the energy sector was a top priority, he said, and he told the portfolio committee on energy that much more was needed to be done by this sector to improve the situation.

This was reminiscent of similar complaints made of the mining industry under the same BEE charter by the director general of the department of mineral resources.

Victor Sibiya said, as DoE’s  deputy director of petroleum products, also acting, that one of the three pillars of his department’s programme was compliance, monitoring and enforcement and whilst 30% of petroleum licensing permits showed around a 50% compliance factor this was not enough and new legislation was on its way to “toughen up” on B-BBEE regulations.

New code called for

The challenge at present, he said, was that the process of penalisation was far too cumbersome and did not deal sufficiently with repeated offenders.   A revised code was urgently required, he added.

On a separate subject, Sibaya said that as far as the basic fuel price (BFP) was concerned all calculations were based as if the final product had been produced in South Africa.  DoE was at work, he said, on a paper studying the various elements that contributed to the BFP, particularly with regard to smoothing out fluctuations to the consumer and attempting to align municipalities to the magisterial zones which governed the distribution.

Retail margins were also being studied in a second round of estimations working with operations carried out by what was referred to as the “DoE model service station”. Other factors included the shortly to be published biofuels price schedule which would govern the mix with petroleum products.

Reaching out

Further to economic transformation programmes, Sibaya spoke of a programme to establish fuel stations in deeper rural areas supplying other forms of energy needed by households such as LPG and extending services to include food, household retail goods and community services to improve quality of household life amongst the poor, another NDP priority.

In broad terms the acceleration of LPG supplies to rural areas, in fact to all areas in general, would contribute greatly, he said, to this objective.

Acting DG Tseliso Maqubela said he would respond to the parliamentary enquiry on the volatility of fuel prices in a prepared paper shortly, as this issue was also in the process of being studied at present. When asked about the levy on purchase of vehicles and where the funds went, Maqubela said this was in national treasury’s domain and was “probably an attempt by treasury officials to mitigate on carbon emissions”.

Refinery decisions

Touching on petroleum issues, DG of energy policy, planning and clean energy, Ompi Aphane, told the committee that a decision would be taken during 2016 on expanding oil refining capacity in South Africa based on the conclusions of the liquid fuels infrastructure plan.

Contributing to the basic costs of energy at the moment in South Africa, he said, were current world tensions particularly in the Middle East.   Self-dependency, however, was unfortunately only a long-term goal, he said.

A similar plan to increase refining was an increase in gas supplies based on the current gas usage master plan that had been started and this programme would be concurrent with an urgent expansion of gas storage facilities in the country.

Minister weighs in

Most of parliamentary question time was occupied by the new minister of energy, Tina Joemat-Pettersson, who spoke broadly on energy issues; the fact that she recognised the need for urgent decisions by her ministry; and the necessity for her recently launched ministerial advisory committee on energy to receive input “in order that the opinions of all stakeholders can be considered.”

Such a ‘brains trust’, she said, should also include representation from the portfolio committee on energy itself.

Other articles in this category or as background

http://parlyreportsa.co.za//?s=bee+liquid+fuels

http://parlyreportsa.co.za//bee/eskom-black-owned-coal-mining/

 

 

Posted in BEE, Energy, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Special Recent Posts, Trade & Industry, Transport0 Comments

Integrated energy plan (IEP) around the corner

IEP a few months off

Benedict MartinsAn integrated energy plan (IEP) for South Africa covering the full energy spectrum will definitely be published before the year end, according to the director general, department of energy (DOE), a fact also confirmed by minister Ben Martins when addressing an energy conference in Johannesburg recently.

Ms Nellie Magubane, when addressing the relevant portfolio committee under chair, Sisi Njikelana who had called for an update on the energy plan, was accompanied by minister Ben Martins at the time and present for his first meeting in Parliament. The minister acknowledged and highlighted the importance of unfolding the plan as part of the country’s investment credentials as soon as possible.

Continuing energy story

Whilst re-confirming that the strategy was still at public participation stage, DG Magubane said there was “no end-state tomorrow” with the plan but rather a reflection of a “phased approach as the country’s appetite for energy as it  develops”.

The process began, she said, with the 1998 White Paper, the development of independent powers system operators (ISMO) and the accompanying ISMO Bill also awaiting the production of the IEP, the National Energy Act in 2008 and regulations on resources that have followed. The IEP this year would start the energy initiative rolling to be followed by gas development plans.

Not just supply factors

In the years since apartheid, said Magubane, when energy had different directives which were focused primarily on just maintaining supply, what had changed significantly were economic, environmental and social imperatives which now were being drawn in and superimposed. “The fixation with supply capacity is not now the only criteria to be considered in the energy paradigm”, she said.

The liquid fuels shortages of 2005 and subsequent electricity disruptions in the years up to 2008, Magubane said, had shown the need for coordinated planning to avoid disparate plans and contradictory initiatives in the sectors of electricity, liquid fuels and gas.

A twenty-year road map for the liquid fuels industry was in progress by the department, she said, and a gas planning infrastructure plan was to be developed once the extent of resources were better understood.

International view

Through time, and above all because of energy security, Magubane said, scenario planning has changed in South Africa to take in security, environmental and climate response factors. In conjunction to long-term climate change policy and agreements, lessons had been learnt from the IEA, Austria, Belgium, Canada, the Czech Republic, Italy, Japan, the Netherlands, Norway and Spain, she said.

When asked what had been learnt from a study tour of the USA, DG Magubane said that the primary aspect learnt there was the success of establishing localised energy resources, focusing on what mattered most to the USA and reducing dependence on imports. We learnt, for example, that we must not try a change the impossible or employ unrealistic factors but move according to what was a fact locally. “For example, South Africa has a lot of coal but little water and these factors have to be built in, not ignored.”

She said that the overseas studies where different economies and different state policies were involved, due note that the position had changed radically in South Africa had to be acknowledged, as had been the case in many of those countries.

Control of resources

“For example, government has come from a position where in SA we were determining the appropriate level of involvement with the liquid fuel levels industry during transition to a rapidly globalising picture, to now having to maintain a strategic role in shaping all key sectors of the economy.”

In response to queries from parliamentarians, she acknowledged that the IEP to be produced would not incorporate any powers to the minister, who “would rather be able to exercise any powers affecting energy matters through normal regulatory enforcement contained in the many pieces of legislation that applied to the energy sector, such as the Energy and Gas Acts.”

Pricing restructuring

On pricing issues as far as the IEP was concerned, Ms. Magubane responded to questions that national treasury figures had so far been the base of determinations but in the light that submissions and input from stakeholders which were to emerge from the process now in progress, the issue of price factors could in all probability be reshaped.

In answer to complaints that that there was still no indication from her, or DOE, where the country was going in hydrocarbons, electricity or renewables and what pricing factors were involved for urgent investment needs, the chair asked that DOE be given time to develop the final report or “everything would go in different directions”.

DG Magubane assured parliamentarians that the final plan would enable everybody to weigh up infrastructure plans with government policy, even bearing in mind that the position is constantly changing given such issues as hydro input from neighbours, gas exploration in various forms and global tensions.

previous articles on this subject
http://parlyreportsa.co.za//uncategorized/mineral-and-petroleum-development-bill-grabs-resources/
http://parlyreportsa.co.za//cabinetpresidential/president-obama-and-power-africa/
http://parlyreportsa.co.za//cabinetpresidential/nuclear-goes-ahead-maybe-strategic-partner/
http://parlyreportsa.co.za//energy/petrosa-has-high-hopes-with-the-chinese/

Posted in Electricity, Energy, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Durban/Gauteng pipeline still three years behind

NERSA to review Transnet’s progress…

engineering news

engineering news

In commenting on NERSA’s decision not to allow Transnet’s application for a 22.6% increase but instead hold this back to 8.5%, Dr Rob Crompton as pipeline regulator was starting a “prudency” review of the Durban/Gauteng fuel pipeline project in view of the fact that it was three years behind.

It was unlikely to catch up and costs had escalated from an original R9.5bn in 2005 (at the last count in 2010) to R23.4bn.  The the overrun was now into unknown realms, he said.

Whilst Transnet has a network of 32 pipelines over 3,800km, the current new multi-product pipeline, or NMPP, has been giving headaches for some considerable time mainly due to its multifaceted product pumping nature.    NERSA said that they were using the word “prudent” because they did not wish to jump to conclusions or make any assessments themselves until the project was complete. The minister of public enterprises has called for an investigation into the escalating costs, meanwhile.

Pipeline volumes declining

It was notable NERSA,  as a whole, has to bear in mind that in the case of the Transnet application for a tariff increase the application was for one year only not multi-year. The worrying factor to NERSA, Rob Crompton said, was that volumes carried on the pipeline were declining – a lot of which was due to the fact that whilst some six grades of petrol, two diesel and also biofuels were carried, there also came a major complication with high and low sulphur content diesel where special tanks and road haulage had to be used.

As an outsider, Dr Crompton said that NERSA could see that Transnet had been asked to quadruple its assets but there had been no injection of capital with the result that Transnet seemed to be building on a “pay as you go “ principle, raising capital where necessary. This was far from satisfactory, he said.

Dr Crompton noted that no further help had been mentioned in the 2013 Budget speech

Fuel price structure complicated

NERSA said that of the nearly thirty items that went to make up the petrol price structure in South Africa, from road accident funding to wholesale margins, only about 16% of the price came in “administered prices” and NERSA, in establishing their views, had only studied one element of this.

He said that in studying Transnet’s application and finally setting a much lower figure, a balance had to be found between the principle adopted of “user pays”, in other words the motorist, and Transnet being able to “claw back” unspent sums or altering over-charged budgets.

Storage nearly finished

nmpp tanksIt was noted, however, that Transnet forecast a 4.6% increase in volumes in 2013/14 and that the tank storage projects at either end of the line should be finished shortly.

NERSA said it was trying to work with the department of energy to get consistent regulations on the whole, or at least a lot more parts, of the entire cost structure but it was unlikely as things stood whether pipeline tariffs would become “multi-year” to assist in longer term planning from what could be seen.

Parliamentarians were complimentary to the NERSA staff on their diligence and producing a result which had helped the consumer in difficult times.

Associated articles archived
http://parlyreportsa.co.za//uncategorized/transnet-says-freight-rail-operations-coming-right/
http://parlyreportsa.co.za//energy/nersa-complains-of-limited-oversight-on-new-oil-pipeline/

Posted in Energy, Finance, economic, Fuel,oil,renewables, Labour, Public utilities, Trade & Industry0 Comments


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