OIL FIRMS LOBBY FOR EXEMPTION FROM LAW
THE South African oil industry is pressing for an exemption from the Competition Act to be able to ensure secure fuel supplies during the Fifa Soccer World Cup next year.
James Seutloadi, chairperson of the South African Petroleum Industry Association, got a sceptical reception from MPs when he outlined the request before a parliamentary committee yesterday.
MPs questioned the scope and motives for the exemption Sapia was seeking.
The Competition Act forbids collusion on pricing and on the distribution of market share. It also makes it illegal for companies to compare stocks and to decide where each should focus its business.
But Seutloadi insisted the industry wanted an exemption only to allow the six major oil companies to discuss the security of supplies and to make plans to ensure that fuel kept flowing.
"If oil companies could not share information about stocks and impending pressures, they would not be able to foresee a crisis.
"There is no red herring. We are not trying to circumvent anything. We are not trying to get out of doing anything we ought to do," he said in response to tough questions.
Sapia was called to the committee to explain the brief jet fuel crisis in Gauteng earlier this month, when airlines were asked to fill up outside the country or away from Gauteng.
Sapia said the crisis, which saw stocks drop from the usual five-day reserve to just two days, was caused by:
lThe fallout from production problems at a refinery in June;
lLogistical problems experienced by Transnet, which delivers most of the fuel to Johannesburg; and
lA Competition Commission prohibition on oil companies to compare notes on supply security.