The director-general of the department of energy, Nelisiwe Magubane, told the media at a roundtable briefing on an audit of the Liquid Fuels Charter that various options are available to government in the Petroleum Products Amendment Act to address non- compliance. “Among others, these interventions include the option to withdraw the license to operate,” she said.


The Liquid Fuels Charter was drafted in 2000, setting out targets for transformation in the industry, which covers the six major oil companies in South Africa – PetroSA, Sasol, Chevron, Total SA, BPSA and Shell.

In 2010 Minister of Energy, Dipuo Peters, commissioned an audit of the Liquid Fuels Charter of 2000 to assess compliance. Yesterday – two years later after the commissioning – the results of the audit were released and Peters labelled these as “extremely disappointing” and “dismal”. The audit was conducted by Moloto Solutions CC.

Peters said that over the 10 years under scrutiny, the overall compliance level stands at only 48%, with average effective narrow-based black shareholding at only 18.9% instead of the 25% envisioned.

“Out of this 18.9%, representation for black women stands at a meagre 6.72%, while only one oil company, Total SA, has fully complied with the obligation for ownership by black shareholders,” she said.

The findings highlight shortcomings in skills development, employment equity, preferential procurement, access to joint infrastructure and retail networks among others.

Peters said that the findings of the report were shared with Cabinet who will refer it to the economic cluster to decide on policy steps ahead.

One possibility is to look at a charter for the whole energy sector, instead of just for liquid fuels.

She said that consultations with the CEOs of the oil companies will be finalised in the next two to three weeks to meet and discuss possible remedies for their non-compliance.

Magubane said that new time- frames for compliance will be discussed at these meetings, but that it will not take another ten years before the targets are met.

Deputy-director general of the department, Tseliso Maqubela, said that another punitive avenue could be to curtail the capacity of those who continue to violate the law, for example through limiting their ability to import.

SA, however, is a net importer of liquid fuels and security of supply of fuel is a major focus for the country’s economic stability. This begs the question whether punitive measures to either suspend operating licences or curtail capacity to import would not harm the country instead of punishing the offender.

“This government cannot be threatened by anybody.

“There could be pain, but it will be short-lived,” Maqubela said. “If companies want to hold us to ransom, there will be others that step in, for example PetroSA could come in and deal with shortages,” he said.

The spotlight was also cast on the structures of some of the big transformation deals that has been concluded by the oil companies with critics querying whether these deals resulted in true transformation where the participants have input into decision-making.