Gwede Mantashe considers application to exclude Nelson Mandela Bay from fuel price drop

Delays by Transnet to fix the fuel gantry in the Port Elizabeth harbour will cost motorists in the Nelson Mandela Bay region dearly from next month as they will not receive the bulk of a significant drop in the price of fuel – that is if the Minister of Mineral Resources and Energy, Gwede Mantashe, approves an application by the Liquid Fuel Wholesalers Association.

The Department confirmed this week that an application to have Nelson Mandela Bay and surrounding towns rezoned as an “inland” region, despite its two harbours, is before Mantashe for consideration.

In June 2024, a vessel carrying LPG gas collided with the Tanker Berth at the Port Elizabeth Harbour, rendering it unusable.

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

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

The full answer from the department to questions from Daily Maverick about the “rezoning” of Nelson Mandela Bay reads: “The Minister is considering the request after consultation with the fuel industry associations. All the affected Magisterial District Zones will change once the Minister has taken a decision on the request.”

Read more: Harbour debacle — Nelson Mandela Bay fuel wholesalers ask minister for exemption from price drop

The application is based on the extra travel costs borne by fuel wholesalers as they now have to fetch fuel at the East London Harbour and transport it to Nelson Mandela Bay by road.

The argument put forward to the minister is that fuel wholesalers, transporters and retailers cannot be expected to operate in a blatantly unfair business environment, that they can not cover the increased costs and that a rezoning increase will be a “small fraction” of the price reduction.

It is understood that if approved, this “rezoning” price regime will remain in place until Transnet has repaired the fuel gantry and fuel can again be imported at the Port Elizabeth Harbour.

Commenting on this development, the Democratic Alliance’s James Lorimer asked: “What are they thinking? There is no way the people of Nelson Mandela Bay should suffer financially for mistakes made in the harbour. There is also no way in good conscience that Mantashe can agree to put the profits of fuel wholesalers ahead of the interests of residents of an entire city.”

On Thursday, the Automobile Association said South African motorists could expect to save more at the pumps in October when fuel prices were adjusted next week. 

Current unaudited data from the Central Energy Fund (CEF) indicate significant reductions to fuel prices across the board, making this the fifth consecutive decrease this year.

“According to the CEF’s figures, ULP95 petrol is expected to be lower by around R1.13/litre while ULP93 is set for a drop of around R1.05/l. Diesel is expected to drop between R1.12/l and R1.10/l while illuminating paraffin will drop by around R1.08/l.”

Read more: Consumer Relief — AA projects big fuel price cuts at the pump in October for fifth month on the trot

If Nelson Mandela Bay is rezoned, motorists will pay an extra 30 cents per litre of petrol, which will erode the gains from a drop in the price of petrol. Inland prices for diesel, paraffin and liquified gas are also higher.

“Although we are expecting fuel to be cheaper in October, we remain committed to advocating for a sustainable solution to mitigating high fuel costs and believe it is still necessary. The AA again calls on the government to urgently initiate a transparent review of the fuel price and, critically, to involve all role players who have a stake in fuel pricing,” the AA said in a statement on Thursday.

The official fuel pricing announcement for October by the Department of Mineral and Petroleum Resources (DMPR) is expected on Monday, 30 September, ahead of the adjustment at midnight next Wednesday, 2 October. DM