Petroleum producers seek permission to coordinate operations, avoid shortages

South Africa’s petrochemicals sector has had a difficult year. Glencore’s plant in Cape Town shut down in February and the sector is facing major challenges with natural gas feedstock shortages. All of the major players in the sector are reevaluating operations in the country. The energy sector already has a 30% unemployment rate and this could worsen if the sector doesn’t see significant turnaround soon. The industry’s representative body, the South African Petroleum Industry Association has applied for specific exemption from the Competition Act. This exemption would allow producers to coordinate shutdowns to prevent critical shortages in the country. – Melani Nathan

South Africa’s petroleum lobby seeks competition act exemptions

By Paul Burkhardt

(Bloomberg) –The South African Petroleum Industry Association has applied for exemptions to the nation’s competition rules in order to “prevent and mitigate supply emergencies,” according to a government notice.

The exemptions to the Competition Act would allow joint planning around the scheduled shutdown of refineries and coordinate reactions to unplanned outages by members including Total, Royal Dutch Shell and Sasol, that own refineries in South Africa, Sapia, the industry lobby group, said in a Government Gazette notice published December 21.

More than 40% of South Africa’s crude-oil refining capacity has been shut this year by accidents that occurred, including one at a Glencore unit’s refinery in Cape Town and Petroliam Nasional’s Engen refinery in Durban.

Read also: Can SA refineries survive Covid-19, looming clean fuel regulations?

Sapia has applied specifically for exemptions from “certain provisions” in Chapter 2 of the Competition Act, the notice said. It also requests that collective interactions between the industry and government be allowed. The lobby group didn’t immediately return emails seeking comment, while the Competition Commission said it would reply later.

“This exemption does not extend to the wholesale, commercial and retail trade of liquid fuels by Sapia members,” it said. It also doesn’t extend to members discussing prices, markets, tenders or competitive strategies.

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