By Lehlohonolo Lehana.
Engen and Vivo Energy have announced the completion of the transaction to combine these respective businesses, with Petronas selling its 74% shareholding in Engen to Vivo Energy.
In the announcement made today, the parties said this transaction was creating a Pan-African energy champion.
The combined Vivo Energy Group now has over 3,900 service stations, and more than two billion litres of storage capacity across 28 African markets.
Stan Mittelman, CEO of the Vivo Energy Group, and Seelan Naidoo, Managing Director and CEO of Engen, said the new company will combine the ‘best of both’ from Engen and Vivo Energy, positioning the combined organisation for growth in the years to come.
“The enlarged Vivo Energy will only make changes that add value, keeping a ‘business as usual’ approach for customers, partners, suppliers, and employees,” they said.
“As part of the transaction, Vivo Energy has committed to invest a significant amount of capital expenditure to maintain and grow Engen’s operations in South Africa, ensuring a modern and efficient business, for the benefit of the South African population.”
The group has also committed to major investments in renewable solar power generation projects to help transform the economy, while supporting a just energy transition for the country.
BP announced last week that it has drawn up a “long-term” strategy for its presence in South Africa, which includes expanding its over 500 forecourts and upgrading its service offerings across the country.
This followed notice from competing petroleum group, Shell, which outlined its plans to exit its South African downstream business, which includes over 600 service stations.
Meanwhile Data for the third week in May shows that motorists are in store for a sizeable cut to prices – with petrol and diesel in line for reductions.
According to week three data from the Central Energy Fund (CEF), petrol and diesel prices are showing an over-recovery of between 83 and 90 cents per litre.
Petrol prices could be coming down by 84-85 cents per litre, and diesel prices could be cut by 86-90 cents per litre.
This is thanks to a much stronger rand and lower global oil prices relative to April, both of which contributed to the over-recovery.
The rand had a strong week last week which continued into this week. While there was some consolidation on Monday (20 May), the unit managed to retain its strength under R18.20 to the dollar, sticking around those levels on Tuesday.