Industry organisation the Fuels Industry Association of South Africa on November 28 briefed the Joint Meeting of the Portfolio Committees on Trade, Industry and Competition; Transport; Minerals and Petroleum Resources; and Electricity and Energy on the strategic importance of the Durban Island View Precinct (IVP), the challenges operators face and measures required to safeguard South Africa’s fuel supply.

The association, together with some of its members, provided context on the facilities and operations at the IVP and the Section 79 Direction issued by the Minister of Transport.

The association emphasised that the IVP is South Africa’s primary energy gateway and a designated national key point.

Operators in the precinct manage 72% of the country’s imported liquid fuels, including 93% of petrol imports and 71% of diesel imports. They produce and distribute specialised lubricants for mining, heavy industry and manufacturing and supply supplemental jet fuel to airports nationwide.

The association highlighted that the South African economy cannot function without a stable and fully operational IVP.

Parliament was briefed on the prolonged uncertainty facing operators under State-owned entity Transnet’s proposed Island View Strategy.

The absence of a practical Section 56 implementation plan left long-standing operators on month-to-month leases while still managing tightly integrated infrastructure linking refineries, pipelines, pump stations, berths and storage facilities. This uncertainty disrupted long-term planning and slowed investment, the association pointed out.

Investment in the precinct declined during this period of uncertainty. Operators that had invested R2.4-billion in 2018, only invested R1.1-billion in 2019 and about R500-million in 2021 and 2022, it pointed out.

“Despite this decline, sustained operator investment ensured that critical infrastructure remained functional and that national fuel supply security was maintained,” the association highlighted.

Given the risks to national supply chains, members instructed the association to apply for a Section 79 Direction from the Minister of Transport.

Section 79 empowers the Minister to intervene where South Africa’s national security, strategic interests or economic stability are at risk.

The Direction provides the certainty operators need to maintain and improve infrastructure and, therefore, uninterrupted supply, while ensuring that the port authority receives ownership of immovable terminal assets when agreements expire.

The association reaffirmed its members’ commitment to the National Energy Regulator of South Africa’s (Nersa’s) Allocation Guidelines for Uncommitted Capacity, which guarantee transparent and non-discriminatory access to storage and pipeline facilities.

Members continue to make uncommitted capacity available to third parties where feasible and to work with Nersa to expand access, the association informed.

Members benefiting from the Minister’s Direction plan to invest R60-billion in operations linked to the IVP and have already contributed about R700-million to small-, medium-sized and microenterprise development and supplier development initiatives across their value chains, it added.