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Viewing cable 08PRETORIA215, FUEL PRODUCT SUPPLY ADEQUATE - THE MARKET WORKS

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Reference ID Created Released Classification Origin
08PRETORIA215 2008-02-01 12:01 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Pretoria
VZCZCXRO7222
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #0215 0321201
ZNR UUUUU ZZH
R 011201Z FEB 08 ZDS ZDK
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 3342
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0730
RUEHRL/AMEMBASSY BERLIN 0584
RUEHBY/AMEMBASSY CANBERRA 0607
RUEHLO/AMEMBASSY LONDON 1404
RUEHMO/AMEMBASSY MOSCOW 0730
RUEHOT/AMEMBASSY OTTAWA 0560
RUEHFR/AMEMBASSY PARIS 1263
UNCLAS PRETORIA 000215 
 
SIPDIS 
 
C O R R E C T E D  C O P Y (ADDING SENSITIVE CAPTION) 
 
SIPDIS 
SENSITIVE 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, ISN, EEB/ESC AND CBA 
DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, M.SCOTT, L.PARKER 
 
E.O. 12958: N/A 
TAGS: ENRG EPET EMIN SENV MGMT SF
SUBJECT: FUEL PRODUCT SUPPLY ADEQUATE - THE MARKET WORKS 
 
REF: A) Pretoria 168 
B) Pretoria 132 and previous 
 
1.  (SBU) SUMMARY: Some observers have predicted potential 
shortfalls in the diesel fuel market as some South Africans respond 
to the electricity crisis by purchasing generators (Refs and 
Septel).  All fuel product providers and analysts spoken to note 
that the market is functioning and providing adequate diesel and 
other fuel products from Sasol, pipeline, rail, and road.  They do 
not anticipate any shortages in the foreseeable future.  End 
Summary. 
 
2.  (SBU) Shell's Fuel Marketing Manager - Africa told Energy 
Officer South Africa's inland market for diesel and refined product 
was "tight", but the market was functioning, so he did not forecast 
any shortfalls in fuel products in the foreseeable future.  He 
described the market as follows: 
 
i) 60 percent or 10.5 billion liters per annum: inland refining 
(Sasol Segunda and Sasol/Total Natref) 
 
ii) 40 percent from the coast, of which: 
- - pipeline - estimated 4.2 billion liters per annum 
- - rail - estimated 1.5 billion liters per annum 
- - road - estimated 1.5 billion liters per annum 
 
He said the inland supply situation is likely to remain tight until 
2010 when a second, larger pipeline from Durban to Gauteng comes on 
stream.  However, the market functions well, so that - if needed - 
additional trucks can come from the coast.  In addition, tight 
refinery capacity can be supplemented by imported refined product as 
needed.  (Note: Shell thought that South Africa is currently 
importing refined product, but other sources said that was not the 
case.) 
 
3.  (SBU) The Shell representative said that Shell was in the 
process of acquiring generators for its service stations.  He did 
not foresee any shortfall in supply as individuals and companies 
install generators, absent major installations by mines, but this is 
unlikely because it is not economic for mine production.  Mines use 
back-up diesel generators only for emergency evacuation or 
ventilation. 
 
4.  (SBU) Representatives of the South Africa Petroleum Industry 
Association (SAPIA), Caltex, and the Department of Mines and Energy 
confirmed to Energy Specialist that the diesel and fuel product 
market is tight, but functioning adequately, so they also did not 
foresee any shortages.  Sasol's refineries are skewed for producing 
gasoline, rather than diesel, but they emphasized that adequate 
diesel can always be brought in by the diverse conveyances. 
Refineries are identified as critical by Eskom and the SAG and they 
generate significant electricity for their own operations.  South 
Africa is still exporting some refined product to neighboring 
countries as the supply chain is described as very much integrated. 
 
5.  (SBU) COMMENT: The Embassy is considering the use of generators 
as electricity back-up at residences.  Industry marketers do not 
foresee diesel availability as a problem in Gauteng and the rest of 
the country.  The Shell official also recommended consideration of 
battery back-up, because disruptions are typically only two hours, 
Qbattery back-up, because disruptions are typically only two hours, 
and this solution might be cheaper, less disruptive (noise/fumes), 
and sufficient to run core requirements, like security features. 
 
TEITELBAUM