Energy Dept to probe fuel fund’s interest in buying Chevron
30 June 2016
Cape Town - Energy Minister Tina Joemat-Peterson will investigate why the Strategic Fuel Fund (SFF) has expressed interest in buying Chevron’s assets without her consent, the Department of Energy (DoE) said on Thursday.
The DoE is disturbed at the complete disregard for governance processes by the entity in question, DoE director-general Thabane Zulu said in a statement on Thursday.
“An offer to purchase by an entity of the Department of Energy requires express consent from the Minister of Energy as the ultimate Shareholder representative,” he said. “This was neither sought nor obtained.”
“In view of this failure to observe the correct processes, the Minister of Energy and the director general will initiate a thorough investigation into the matter in consultation with both the boards of CEF (Central Energy Fund) and SFF.”
The Cape Chamber of Commerce and Industry said it was shocked at the plan by the SFF to buy Cape Town's Chevron refinery and 845 Caltex petrol service stations.
"What we need is fewer government-run businesses and not more," said Chamber Janine Myburgh in a statement on Thursday.
"The plain truth is that state owned enterprises have been a disaster. Look at Eskom and its costly attempts to build new power stations. Look at SAA, PetroSA and the Post Office which all run at huge losses. They don't contribute to economic growth, they retard it," she said.
"What makes this even more frightening is that the Strategic Fuel Fund would be used to buy and manage the refinery and its retail outlets. The SFF has no understanding of business. They proved this when they sold off the country's entire fuel reserves for the equivalent of $28 a barrel at a time when the world oil prices ranged between $37 and $44 a barrel. That decision looks even worse now with the oil price close to $50 a barrel."
If the government did not buy the refinery there would probably be a normal commercial sale and the refinery would continue to produce fuel and its 845 petrol stations would continue to provide a service to the public and pay taxes.
"It just does not make sense. People will soon be looking for ulterior motives," Myburgh said.
This article first appeared on Fin24, see here.