Airlines set to sue fuel firms
Businesses hit hard by shortage
December 13, 2005
By Staff Reporter
At least two airlines are considering legal action against petrol firms over the fuel crisis which left passengers stranded at the weekend. SA Airways was to release provisional loss figures today.
SAA and Nationwide said they were considering litigation against petrol companies after supplies of aviation fuel ran dry at Cape Town International Airport on Saturday, causing widespread flight cancellations and delays.
The problem was caused by the delivery of a batch of substandard fuel by Chevron Refinery.
The general shortage of fuel, including aviation fuel, petrol and diesel, has been blamed on technical problems arising from the closure of the country's six refineries for upgrading ahead of the conversion to cleaner fuels from January 1.
Most of the country's refineries are now back in operation, but Chevron in Milnerton is still struggling to get up and running, making the Western Cape the worst-affected area.
The shortage has also been blamed on an increase in demand prompted by a recent petrol price drop.
The Minerals and Energy Department claimed the situation had been brought under control by yesterday, in spite of reports that the shortage was continuing to hit motorists.
A petroleum industry spokesman said shortages at some petrol stations were the result of panic buying.
Construction and transport companies in the province were still bearing the brunt of fuel shortages, but operations at Cape Town International Airport were back to normal, said Deidre Hendricks, spokeswoman for the Airports Company of South Africa.
The effects of the shortage are hitting companies hard.
Yesterday, 40% of vehicles at Bradis Earthworks and Demolition in Airport Industria were unable to operate.
The company's Bradley Hardman said: "This is crazy. I need to fill up 20 trucks and I have no diesel. How am I expected to run a business?"
Faaiz Majiet, operations manager at Stuttaford Van Lines, said they were running on a limited amount of fuel and had made logistical changes in order to meet deadlines.
Yesterday Minerals and Energy Affairs Minister Lindiwe Hendricks called the heads of fuel companies to a meeting in Pretoria and lambasted them for poor planning. She was also angry that they had reneged on an agreement to stockpile a month-long supply of fuel.
A levy of a couple of cents a litre goes to the fuel firms to enable them to stockpile supplies. After the meeting, however, Hendricks said: "We believe the situation is under control."
SA Petroleum Industry Association director Colin McClelland said demand, prompted by public fears, was resulting in petrol stations running dry.
Explaining the background to the crisis, he said: "The bad planning was not about the cleaner fuels exercise but in planning for stockpiling imports during the change-over.
"All refineries had to shut down to make significant changes to equipment to produce the cleaner fuel.
"While they were switched off they were not producing anything and so had arranged to import from the Middle East.
"They said they would be up and running by November 15 so had stockpiled imported fuel up to November 20. But the refineries are not all up and running, and they haven't arranged imports because they assumed they would be running properly."
Emergency supplies were now being delivered by tankers at sea.
Cape Argus