The great South African fuel sell-off: 10.3 million barrels of oil in limbo

The Organisation Undoing Tax Abuse (OUTA) on Friday welcomed the halting of court proceedings regarding the illegal sale of South Africa’s fuel reserves more than three years ago.

The matter was set to be heard in the high court in Cape Town on Friday. In a statement, Outa said the Central Energy Fund (CEF) had filed an affidavit earlier this week which halted the court process.

Fuel reserves case in court

This was after Glencore, the other party and one of the companies that bought the oil reserves, had filed an application earlier this year to prevent the CEF from filling supplementary affidavits with the court.

If the information contained in the affidavits was excluded from proceedings, it would have had a negative impact on the CEF’s legal bid to stop the sale from being affected, Outa said. The fuel reserves are being held in storage at Saldanha and the CEF is refusing to release it to the buyers until the court case is concluded.

Outa said it had written to Mineral Resources Minister Gwede Mantashe asking him to intervene, and though it had not received any formal correspondence from the Ministry in return, OUTA believe the letter will help their cause. Advocate Stefanie Fick, OUTA’s Chief Legal Officer, had this to say:

“So often we headline potential calamity but fail to celebrate the small wins that enable justice and prevent catastrophic events from taking place.”

“Despite the non-event, this agreement between the parties is a huge achievement, which highlights the role civil society plays in keeping government accountable and protecting the country’s interests over individual greed.”

Between December 2015 and January 2016, South Africa’s strategic oil reserves were sold to several companies without due processes being followed.

How much oil is at stake?

No approval was sought from the boards of directors of both the CEF and the Strategic Fuel Fund (SFF). At the time, the decision to sell off our oil reserves was also done without notifying the Minister of Finance, as is required by law. 

The 10.3 million barrels of oil was sold for $28 dollars a barrel to several companies even though it was worth close to $40 dollars a barrel at the time. The Directorate for Priority Crime Investigation, more commonly known as the Hawks, is investigating the sale.

[Reporting by African News Agency (ANA), Editing by Chantall Presence]