By Lehlohonolo Lehana.
The Department of Mineral Resources and Energy (DMRE) says for Eskom to buy diesel directly from the importers, they do not need a wholesale licence from the department.
In a statement on Thursday, the DMRE said that to import petroleum products directly, Eskom would need a licence including import infrastructure and adequate storage facilities which they currently do not have.
“The DMRE confirms that Eskom has applied for the diesel wholesale licencse (sic), however it was not awarded since the application did not meet certain requirements, the details of which have been shared with Eskom as the applicant.”
Eskom applied for the licence to import its own fuel so that it could buy diesel at the basic fuel price – instead of the wholesale price. This would reduce the price from about R23 per litre to around R16, according to outgoing CEO André de Ruyter.
The licence would have saved Eskom around R3 billion on fuel costs over the past year or so.
Eskom currently relies mainly on PetroSA for diesel to supply its open-cycle gas turbines, which often play a critical role in buffering South Africa from more adverse stages of load shedding.
With regards to claims that there is a potential saving of R6 per litre between the Basic Fuel Price and the Wholesale price, the DMRE would like to indicate that the R6 is mainly made up of taxes that the DMRE has no control over. However, if Eskom wants to be exempted from paying taxes which includes the Fuel Levy and Road Accident Fund Levy, Eskom should approach the relevant authorities, added the Department.
Eskom can appeal the decision of the Controller of Petroleum Products to the Minister of Mineral Resources and Energy Gwede Mantashe. That appeal has not been received yet by the Minister.