Nelson Mandela Bay Business Chamber takes Mantashe to court for hiking metro’s petrol price without consultation

10 Oct 2024

The Nelson Mandela Bay Business Chamber has applied for an urgent court order to review and set aside minerals minister Gwede Mantashe’s decision to rezone the metro and surrounding towns, effectively increasing the petrol price.

The Nelson Mandela Bay Business Chamber has brought an urgent application at the Gqeberha High Court for an order that the minerals and petroleum resources minister must reconsider a decision to “rezone” the metro as an inland region after the harbour fuel berth was damaged.

In June 2024, an accident at Port Elizabeth Harbour caused extensive damage, which led to the decommissioning of the fuel tanker berth.

Nelson Mandela Bay has two ports. The Port of Ngqura does not have a facility for tankers to deliver fuel. As a result, fuel wholesalers were compelled to collect fuel 300km away at the East London harbour.

The fuel tanker berth is likely to only be ready for recommissioning in December.

This month, Mantashe approved an application by the Liquid Fuels Wholesalers Association (LFWA) to rezone the metro as an inland region, leading to the region, including adjacent towns, being partially excluded from a more than R1-per-litre drop in the petrol price.

Read more: ‘It was either that or no petrol’ – department explains Nelson Mandela Bay’s petrol price woes

The new petrol price in other coastal cities is R19.94 (from R21 in September) for 93 petrol. In Gqeberha it is R20.77. Other coastal cities pay R20.26 for 95 petrol (compared with R21.40 in September), but in Gqeberha the price is now R21.09.

Petrol prices are even higher in Kariega and the Sundays River Valley.

Impact of high prices

In court papers filed on Thursday, the chamber asked the court to urgently hear their application that the decision to rezone the Nelson Mandela Bay district be set aside and remitted to Mantashe so that he can first consult with the metro’s stakeholders.

But first, the chamber has asked that all records, internal memorandums, directives, policy documents, studies, minutes of meetings and other documentation used by Mantashe to make this decision be handed over to them within five weekdays.

Chamber CEO Denise van Huyssteen said the matter was urgent because the province’s economy was already in recession and every person in the area would be negatively affected by the decision.

Department of Minerals and Petroleum Resources spokesperson Raaphi Maake said this month the rezoning also affected the price of illuminating paraffin, but not LPG (liquid gas) because the gantry that is under repair is not for gas.

In her affidavit filed as part of the chamber’s court papers, Van Huyssteen states: “[Chamber] Members’ businesses, across various industry sectors, rely on fuel to operate their businesses. Given South Africa’s distance to markets and the inefficiencies of ports and rail, logistics costs are among the biggest cost drivers for manufacturers and the local agricultural sector, which has to transport goods to local and export markets.

“To this end, these businesses have to ensure that their logistical costs remain competitive, so that they can compete with production plants within their own national and international operations, as well as with those of competitors.

“Fuel costs are a major component of members’ pricing structures and movements in fuel prices have a major positive or negative effect on competitiveness.

“Members include businesses in the automotive industry, foundries, tyre manufacturers, vehicle components assembly plants, agricultural processing, pharmaceuticals, engineering, wholesale warehousing and distribution in the food and beverage industry, as well as a range of small and medium businesses.

“General transportation costs of the businesses, their suppliers and employees, many of whom travel to work via taxi, are impacted by fuel costs. In addition, the workers of many of the [Business Chamber]’s members are dependent upon Liquefied Petroleum Gas for cooking and lighting.”

Van Huyssteen said the unintended consequence of Mantashe’s decision “is that households will have to make tough decisions between sufficient food on the one hand and adequate fuel on the other”.

She said they were also bringing the application in the interest of the citizens of Nelson Mandela Bay, “who do not have the means and ability to bring proceedings and to challenge the minister’s decision”.

No response

Van Huyssteen said she had addressed a letter to Mantashe on 27 September to request that they, as a major stakeholder in the metro, be consulted on the decision to rezone the metro.

In this letter, she wrote: “While we appreciate the negative impact of this situation on the businesses of the LFWA’s members, we believe it is unfair to transfer this negative impact onto the businesses and consumers of Nelson Mandela Bay.

“We accordingly request that you reject the LFWA’s application and instead seek a workable, equitable solution that addresses their concerns but does not disadvantage the citizens of Nelson Mandela Bay.”

The minister did not respond to this letter. Van Huyssteen said they were also not consulted on what a workable solution for the problem would be.

“Instead, on 30 September 2024 the minister issued the press release in respect of the October 2024 fuel price adjustments.”

More correspondence from Van Huyssteen followed. Mantashe did not respond.

Van Huyssteen said Mantashe did not follow the procedures set out in the Promotion of Administrative Justice Act and that they should have consulted with the chamber as a major stakeholder in the metro.

Daily Maverick is awaiting comment from the Mantashe. DM

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Impact of high prices

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