No decision yet on Iran crude oil imports

Monday, March 26, 2012

Pretoria- Government has not taken a decision on whether to reduce crude oil imports from Iran with a response expected in May, the Department of Energy has said.

"No Decision has been taken by Government on the sanctions issue because the investigation of the response options is far from complete, "said the department on Friday.

Additionally, government is talking to several countries that supply oil to determine what their potential to supply is.

"So far all these engagements have been useful and will enhance the long term solution that government is working towards. They will feed into the overall response, which will be presented to Cabinet towards the end of May 2012," explained the department.

The supply of fuel would generally not be impacted by the engagements that are taking place and the department does not foresee supply disruptions or impact on consumers.

Government is considering all options in terms of the potential impact of the US and European Union sanctions on Iran. At the end of last year, US President Barack Obama, signed a bill expanding U.S. sanctions against Iran to cover its central bank and financial sector, a move that allows penalties on foreign banks that settle oil imports with the Iranian central bank.

"Part of the response includes consultation with a number of countries to look at how they are approaching the matter. Amongst the countries consulted are Iran, United States, Saudi Arabia, Malaysia, Angola and others."

In particular the US was consulted to try and understand the nature of the sanctions but also for them to understand the potential impact of the sanctions on South Africa and SADC. Consultations are still continuing.

Meanwhile, on the issue of refineries, the department said crude oil refineries are privately owned with procurement of the oil being done by each of these companies.

"The oil companies that own the privately owned refineries constantly change their procurement practices and sourcing strategies to suit their own plans," said the department.

Government called on the public not to panic over the supply of fuel.

"There is no need to panic; government is doing everything possible to safeguard the long term fuel supply.

As a matter of policy, the government believes in the use of multilateral bodies to resolve disputes and conflicts.

South Africa heeds United Nations Security Council, and African Union resolutions.

"The current sanctions are bilateral in nature, however, due to the global financial system have a long reach," explained the department.