Nelson Mandela Bay Business Chamber calls for Mantashe to reject petrol price rezoning proposal

Nelson Mandela Bay businesses and residents must not be penalised with higher fuel prices, to compensate fuel wholesalers for additional costs of trucking fuel to the metro, due to repairing of the fuel berth in the Port of Port Elizabeth by Transnet.

This is the message the Nelson Mandela Bay Business Chamber sent to Mineral Resources and Energy Minister Gwede Mantashe as he considers an application to have the metro “rezoned” to an inland zone.

The Department of Mineral Resources and Energy confirmed last week that the Minister was considering an application by the Liquid Fuels Wholesalers Association that will see residents in the city and surrounding areas lose out on the predicted drop in the fuel price.

Read more: Mantashe considers application to exclude Nelson Mandela Bay from fuel price drop

The rezoning application comes at a very difficult time in the province where unemployment is 41%. The economy has been in a recession since the first quarter of 2024.

“If Mantashe approves an application by the Liquid Fuels Wholesalers Association (LFWA) to temporarily rezone the metro and surrounding areas as an ‘inland region’ with respect to fuel prices, the anticipated petrol price decrease for October could be reduced by as much as 30c/litre. For example, a decrease of R1,20 per litre for ULP would result in a revised petrol price decrease of R0,90 per litre for Nelson Mandela Bay. This would also erode the benefits of any future fuel price decreases,” the chamber said.

In June 2024, a vessel carrying LPG gas collided with the tanker berth at Port Elizabeth Harbour, rendering it unusable. The vessel was under pilotage at the time, meaning it was being brought into the harbour by a Transnet pilot.

Transnet triggered an emergency procurement process for experts to assess the damage, but estimates show the damage is likely to be fixed only early in 2025.

The plan was to award the tender by 5 September 2024, and a comment from Transnet on the repair progress is awaited.

The Nelson Mandela Bay Business Chamber, which represents about 700 businesses in the metro, has called on the minister to instead implement an equitable solution that addresses the concerns of the LFWA.

“While we accept that the LFWA’s members are in the untenable position of incurring additional costs that they cannot recover, it is blatantly unfair to transfer this burden onto the shoulders of the people and citizens of Nelson Mandela Bay,” chamber chief executive Denise van Huyssteen said.

“The Eastern Cape economy is in recession and has amongst the highest unemployment rates in the country. The impact of an unnecessary and unfair increase in fuel prices is of grave concern, especially given the knock-on effect on food and transportation costs, as well as the costs of doing business in a metro where we need to be protecting investments and jobs.”

Van Huyssteen said the LFWA had advised the chamber that the extra costs incurred by the fuel wholesalers and transporters cannot be recovered under the wholesale fuel pricing regulations, while indications from Transnet are that the berth will not be in operation before January 2025.

“While the LFWA argues that the increase to inland fuel pricing will be ‘but a small fraction’ of the October price reduction, it remains unacceptable that businesses and residents in the metro should pay the price for a problem not of their making.

“Transnet must expedite the repairs with the necessary urgency and in the meantime the ministers of transport and of mineral resources and energy need to find a workable solution to address the cost concerns and the delivery of fuel to a city with two ports,” Van Huyssteen said.

The chamber previously wrote to the ministers of transport, mineral resources and energy, and trade, industry and competition in August following a request by the LFWA that the metro be exempted from the September fuel price decrease and which did not transpire.

Van Huyssteen said a further appeal had now been sent to Mantashe to reject the LFWA’s rezoning application and to find a workable solution that would not pass on the fuel industry’s additional costs to consumers. DM