Change on the horizon for fuel industry

Thursday, November 18, 2010

Pretoria - The Energy Department has set the wheels in motion on one of the biggest audits in the South African liquid fuels industry in a bid to speed up transformation.

Minister Dipuo Peters on Thursday said the audit process was undertaken to determine the extent to which the industry was complying with the provisions of the Petroleum and Liquid Fuels Charter.

"We acknowledge that we have not been doing well when it comes to monitoring, and therefore it was important to have some kind of evaluation," she said.

The charter came into effect in 2000 and was the first ever industry transformation document. It was a joint effort between government and industry role-players.

Through it, government wanted to see a minimum 25 percent of ownership and control of the industry going to historically disadvantaged groups by the end of 2010.

Peters could not say if government was generally unhappy with the pace of transformation but warned there would be harsh punishment for companies not meeting their obligations --something that could also lead to operators losing their licenses.

"The audit outcome will give us an indication of whether do we have to increase the target or reduce it," said the minister.

The liquid petroleum industry is viewed as an important player in the creation of decent and sustainable jobs.

The audit would include an independent and representative assessment of the state of transformation within the industry against the targets contained in the charter.

It would determine whether or not signatories of the charter are acting in compliance with previous evaluation reports, while developing some form of standardised criteria to asses and monitor transformation and compliance throughout the value chain.

Authorities will also be in a position to get early warning signals of any potential deviation that might impede the achievement of the intended policy measures and targets.

The industry has welcomed the audit.

"The general feeling is that we do need to improve on many areas and the assessment will tell us exactly which areas need improvement... I'm confident that the industry will respond positively," said South African Petroleum Industry Association chairperson, Maurice Radebe.