No water, lights or petrol?

Felicity Duncan

05 Feb 2008 18:10

South Africa is short on power, and looks likely to be short on water and petrol too. At least our carbon footprint will be smaller.

Despite the floods of bad news we've had over the last couple of weeks, there is a glimmer of light; with all the energy shortages, our carbon footprint is bound to decrease!

Other than that silver lining, things look a little shaky. The electricity crisis has been well documented (see Special report: The Eskom crisis), as have its ravages on industry (see Prince of Darkness, Power cuts not a "disaster" - Cynthia Carroll). The potential water problem that may be brewing is all over the news (see SA may face water-contamination crisis, Dr Cornelius Ruiters: Deputy director-general for water-resources infrastructure, DWAF).

And now, the petrol crisis approaches. On Friday, Business Leadership SA CEO Michael Spicer warned Moneyweb of the impending problems (see Michael Spicer: CEO, Business Leadership South Africa). He was discussing the Eskom problem, but argued that the energy crisis was deeper than just the utility's failures.

"I think we need to watch the liquid fuels positions quite carefully, particularly in the centre of the country. Again, industry has been making those noises. We need to incorporate that into our overall energy security thinking. It's not just an electricity issue," said Spicer.

Rumbles began appearing about possible fuel problems over the weekend, linked to the electricity crisis. Basically, without power, local refineries can't convert raw oil into petroleum products. Which means no petrol at the pumps. The whole situation is being exacerbated by people buying diesel-guzzling generators.

Fuel Retailers' Association CEO Peter Morgan sounded some pessimistic notes about the motorists' petrol supply on the Moneyweb Power Hour (see Peter Morgan: CEO, Fuel Retailers Association).

"We're very worried - not only because people are buying generators, but what happens if you have power failures at refineries or power failures at pumping stations in the pipeline? The problem we face is, and we learnt it in 2005 with Christmas, and we learnt it again last year, that the whole infrastructure is under such pressure that any small problem ends up as a serious issue on a retail forecourt. I mean I woke up this morning to the news that Calref Refinery went down over the weekend and that's where our concerns start, plus we had a problem with the pipeline over the weekend. We almost sit at the end of the food chain and wait for it to hit us."

And Morgan was not only concerned with supply issues, but also with the retailers' chances for compensation if the petrol supply chain breaks down.

"The contract that's signed between the wholesaler and the retailer, the service station owner, doesn't allow for any form of compensation. So if an oil company faces a situation where he's only got so much product, he needs to give it to customer A, where he suffers a penalty if he doesn't, or customer B, which is a service station, where he suffers no penalty. It's quite obvious that we can see where the product is going to go to."

Not to us retail customers, that's for sure. So it seems we can look forward to sitting in the dark, thirsty, and unable to drive anywhere nicer. Ideal circumstances for a baby boom, particularly given the breakdown of safety standards among condom manufacturers.