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Speaker 1: Seven oh two weekend Breakfast Motoring.

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Speaker 2: At nine minutes after seven o'clock time prices to talk motoring.

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Speaker 2: So there's been a lot of reporting over the last

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Speaker 2: couple of weeks. This is now week three. Were going

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Speaker 2: into week form of the American and Israeli war in Iran,

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Speaker 2: and they've been concerned about what will happen to global

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Speaker 2: oil supplies as.

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Speaker 3: Well as the price of oil.

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Speaker 2: We've seen the price of oil increase as a result

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Speaker 2: of that conflict in the Middle East.

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Speaker 3: This week. You may have seen, you may have received it.

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Speaker 2: You may have been the person that sent it at

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Speaker 2: some WhatsApp messages that are claiming that they are fuel

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Speaker 2: supplies that there's going to be sudden price hikes and

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Speaker 2: even unressted in South Africa. You may have been a

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Speaker 2: person that tried to panic.

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Speaker 3: Buy fuel this week.

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Speaker 2: I don't know how someone panic buys fuel, but it

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Speaker 2: is a thing that is happening, so we're looking at

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Speaker 2: it this morning. Should you be worried about fuel supplies

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Speaker 2: in South Africa? The Department of Mineral Resources, You shouldn't

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Speaker 2: that our our supplies are pretty stable, but should you

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Speaker 2: be worried about the cost in a.

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Speaker 3: Couple of months.

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Speaker 2: So joining us on the line to talk through some

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Speaker 2: of these issues, we're joined by a resident motoring enthusiast,

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Speaker 2: Warren Tucker. Weren't a very good morning to you.

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Speaker 3: Good morning, Good morning, hi, Warren.

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Speaker 2: So we are talking fuel supplies, but also fuel prices

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Speaker 2: of course because of what's happening in the Middle East,

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Speaker 2: that conflict in Iran from the US and the Israeli attacks.

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Speaker 2: And so talk to us firstly about let's talk about

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Speaker 2: the supply, the global oil supply and how you run

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Speaker 2: fits into everything.

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Speaker 1: Okay, So basically what happened is South Africa has become

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Speaker 1: a neck importer fools product. We used to refine all

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Speaker 1: our crude oil in South Africa, Okay, So we had

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Speaker 1: a couple of refineries all over the country. And essentially

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Speaker 1: what we do is we'll import oil because we don't

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Speaker 1: have much here, and we would refine and make our

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Speaker 1: own fuel. We could control the price obviously, and we'd

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Speaker 1: have fuel in reserve, so we'd always have a ninety

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Speaker 1: day The country always would have a ninety day reserve

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Speaker 1: of crude oil in order to do their own refining.

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Speaker 1: So what's happened is over the last couple of years.

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Speaker 1: We had sat Prep which was in Durban, that was

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Speaker 1: shut down in twenty twenty two due to that flood

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Speaker 1: damage that took place there. Okay, that one hasn't been repaired.

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Speaker 1: It's still not working that place in Durbin. That is

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Speaker 1: the single biggest loss to Essays fuel supply. That was

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Speaker 1: one of the biggest refineries we had. We then had

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Speaker 1: the Engine Refinery in Durbin. This was closed after closed

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Speaker 1: in twenty twenty after an explosion. It's never been repaired,

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Speaker 1: has not has not been put back to, it's never

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Speaker 1: been restarted. Okay. That one used to produce petrol and diesel. Okay,

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Speaker 1: Then we've got Petro Essay which is Muscle Bay. All right,

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Speaker 1: they're struggling. So that was a gas to oil system.

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Speaker 1: They're struggling because of gas feed stocks. Okay, it's not

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Speaker 1: completely down, but it's not producing. It's not giving us

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Speaker 1: reliable production basically. Then what we had was Natrev Natchef

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Speaker 1: Is in Sassalberg. That one was temporarily shut down in

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Speaker 1: twenty twenty five. It had a fire, but it is

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Speaker 1: currently operating and is restored. So in South Africa right

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Speaker 1: now we've got the Pastron energy plant which you find

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Speaker 1: in table viewing capita. We've got NATREV and we've got

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Speaker 1: the sasal Secunda which is cold cold to liquid plant.

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Speaker 1: That's it. That is our refining capacity.

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Speaker 3: Oh what sure, what's happening with your line there?

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Speaker 1: Can you?

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Speaker 3: I mean now you are sorry? We lost you after?

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Speaker 3: That is our refining capacity.

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Speaker 1: Yes, what I was saying is that's our refining capacity.

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Speaker 1: That's all we've got at the moment. Okay. So anything

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Speaker 1: that comes into South Africa in terms of oil, we

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Speaker 1: can send there, but the capacity is not as good

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Speaker 1: as what it used to be. We used to produce

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Speaker 1: eighty percent of our fuel in house. Okay South Africa.

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Speaker 1: South Africa consumes about six hundred thousand battles the day

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Speaker 1: of Brent Truite obviously turned into petrol, oil and all

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Speaker 1: the other stuff that you get from it. Right. So currently,

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Speaker 1: what we said was now is a situation where we've

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Speaker 1: got import finished product. Okay. So now we currently import

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Speaker 1: between seventy and seventy five percent of our fuel is imported.

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Speaker 1: It's brought into South Africa in the form of diesel, petrol, right,

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Speaker 1: and it's finished product. Pic ships come they birth in

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Speaker 1: at the ports, pump in pumps the product into storage

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Speaker 1: facilities and from the basically distributed across the country where

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Speaker 1: it needs to go. So that's the situation in terms

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Speaker 1: of South Africa. In terms of what's going on in Iran,

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Speaker 1: we've got a straight over moons. Basically, what happens there

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Speaker 1: is all all the fields, all the ships that gour

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Speaker 1: and refuel that are in the GLF region have to

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Speaker 1: pass through the strait, which is thirty nine kilometers wide

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Speaker 1: at its narrowest point, and they've got to pass through

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Speaker 1: there to get into the ocean so that they can

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Speaker 1: get to wherever they need to go in the world. Now,

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Speaker 1: you know, what's the conflict that's going on. Ran has said, well,

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Speaker 1: look we've closed the strait. Yes, there are conflicting stories

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Speaker 1: where they are saying, well, look you can pass through

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Speaker 1: as long as you're not in an American shift. There's

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Speaker 1: all these things that are coming out, but effectively there's

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Speaker 1: a blockade happening there. There are ships. Insurance companies are saying, look,

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Speaker 1: it's too expense, so fast risk ensuring you if your

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Speaker 1: ship's going to go through there. So a lot of

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Speaker 1: ships that are loaded are standing and waiting because of

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Speaker 1: all these knock on effects. Right that's currently where were sitting.

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Speaker 2: And so are we seeing then because of the straightufmons

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Speaker 2: being closed or restricted the shipments of fuel that would

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Speaker 2: have been under way or destined for South Africa? Are

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Speaker 2: we seeing then being potentially being delayed and or canceled

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Speaker 2: because of that the situation playing out in Iran.

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Speaker 1: So only time will tell, but a lot of the

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Speaker 1: ships are delayed, heavily delayed. They obviously because we buy

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Speaker 1: fuel the way we buy fuel. You've paid already upfront

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Speaker 1: and you already know more or less in terms of

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Speaker 1: what the country's needs are. You know when the ships,

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Speaker 1: when to place the orders and the timing of those

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Speaker 1: ships landing to make sure that currently the country doesn't

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Speaker 1: run out of fuel at any point because as the

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Speaker 1: fuel has been used, it's been replenished. Right now, what

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Speaker 1: we end up, what ended up happening is is because

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Speaker 1: the strait is closed, these ships are delayed and a

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Speaker 1: lot of them might not come through. As I said,

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Speaker 1: insurance companies are either hiking a premium or canceling insurance

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Speaker 1: all together and saying, look it's too dangerous right now

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Speaker 1: for you to go through. So maybe just park it

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Speaker 1: for a bit. South Africa does, however, say that they

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Speaker 1: only get eighteen percent of the imports from the calf

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Speaker 1: regions and that they have other suppliers in Africa Nigeria

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Speaker 1: where they get the bulk of their fuel from. So

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Speaker 1: there are other suppliers that they get their fuel from,

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Speaker 1: and that there are ships on the water and they

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Speaker 1: are on their way. That is what they're saying, right.

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Speaker 2: And so we have a WhatsApp message, yeah, pat saying

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Speaker 2: do we not get most of our fuel from Nigeria

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Speaker 2: and very little from.

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Speaker 3: The Middle East?

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Speaker 2: I know, I was reading an article this week saying

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Speaker 2: we are putting some industry bodies, are putting some supply

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Speaker 2: measures in place to ensure that the current stock what

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Speaker 2: we have at the moment last until shipments from India

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Speaker 2: and West Africa arrive. So just how much fuel do

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Speaker 2: we get from non Middle East sources? So like India

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Speaker 2: and or West Africa.

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Speaker 1: Yeah, sas I was saying, we only import eighteen percent

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Speaker 1: of our fuel needs, excuse me, from the Middle East

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Speaker 1: or from the Gulf regions. The balance of that is

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Speaker 1: split between India and Nigeria and all the other places

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Speaker 1: where we purchase from right, So as I said, those

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Speaker 1: ships should be on the water and should be persting soon.

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Speaker 1: What we're starting to see though, is that, yes, the

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Speaker 1: government is saying that there is no immediate risk of

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Speaker 1: fuel shortages. But I can tell you that this week

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Speaker 1: a lot of the wholesale pulling stations in Port Elizabeth

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Speaker 1: had run dry. A lot of transporters trucks were standing

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Speaker 1: because there was no supply. I can tell you that

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Speaker 1: there's a couple of guys are spoken to their own

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Speaker 1: very big filling stations that are essentially you know, your

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Speaker 1: tier one, your big brand filling stations that placed orders

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Speaker 1: a week ago. When you place orders for fuel, obviously

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Speaker 1: you pay upfront and then there's a schedule and you're

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Speaker 1: delivered according to that you get an allocation. They were

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Speaker 1: told that the allocations are closed until the first of April.

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Speaker 1: So a lot of these garages are standing dry at

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Speaker 1: the moment. Everything. If you look at South Africa as

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Speaker 1: a whole, we no longer move a lot of products

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Speaker 1: via rail. Most if all, your products has moved on

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Speaker 1: the road via via truck. You've got your tort liners,

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Speaker 1: your refrigerated trucks, you've got your side tippers which are

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Speaker 1: taking your goods to port so that they can be exports.

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Speaker 1: So your minerals, you've got the Pumelanga best the supply

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Speaker 1: for the for the coal powered power stations. There are

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Speaker 1: struck trucks is moving the coal. You see them on

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Speaker 1: the road. They move in the coal from the mine

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Speaker 1: to the power station. And essentially, if we start having

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Speaker 1: diesel shortages where there's there's a problem of guys getting

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Speaker 1: diesel supply. I mean there's a place on the R

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Speaker 1: fifty nine it's called laser Fast that's a massive diesel wholesaler.

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Speaker 1: They are limiting trucks to three hundred details. That's nothing

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Speaker 1: more because they also trying to stretch the supply that

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Speaker 1: they've got because they don't know if they're going to

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Speaker 1: get anything once it's dry, are they going to be

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Speaker 1: able to get from the wholesalers or from the big brands,

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Speaker 1: because they've also slowed that down. Essentially, what government is

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Speaker 1: maybe trying to do is to avoid riots. Maybe they're saying, look,

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Speaker 1: we'll slow down a bit on the commercial siding, keep

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Speaker 1: the retail site going so that there's no upset. But

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Speaker 1: that's that sort of scenario might be short lived if

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Speaker 1: there's no supply that comes in quickly, because as I said,

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Speaker 1: everything is transported by road. So you'll start seeing issues

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Speaker 1: on the shelves. With food, you'll start seeing issues your

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Speaker 1: fruit and veg. You know, they've got to get it

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Speaker 1: to market. They've got timelines to get that to market.

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Speaker 1: So your farmers also rely on diesel to farm, so

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Speaker 1: you know, it's a knock on effect. And the biggest

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Speaker 1: issue is the fact that South Africa has lost its

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Speaker 1: own refining capacity. We are not in a position to

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Speaker 1: control the price. We also not in a position to

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Speaker 1: control what and how we get that fuel. We relying

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Speaker 1: on the open market to source fuel and try to

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Speaker 1: bring in finished product, and that can well well create

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Speaker 1: a potential storm for us, because what would end up

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Speaker 1: happening is the demand on in the market all skide

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Speaker 1: after to the point where the price just shoots through

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Speaker 1: the roof. And as you know in South Africa, I

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Speaker 1: mean fuel prices go up. Everything goes up.

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Speaker 2: Right, and so with regards to supply, So I mean

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Speaker 2: even the Department is acknowledging that there are kind of

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Speaker 2: these supply issues at certain I guess certain outlets, but

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Speaker 2: that they're asking the public not to panic by because

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Speaker 2: some people they are some WhatsApps during the rounds, they

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Speaker 2: are screenshots during the rounds, and so they're asking people

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Speaker 2: not to panic buy because this can also then contribute

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Speaker 2: to the situation. Everyone's kind of afraid of where and

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Speaker 2: I don't know how you panic by fuel, but anyway,

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Speaker 2: but saying you know, please don't panic by this could

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Speaker 2: then just place unnecessary strain on the supply.

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Speaker 1: Definitely, we're not having this conversation for people to go

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Speaker 1: out in panic by and try and store fuel. That

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Speaker 1: can be dangerous. You know, if you store petrol incorrectly,

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Speaker 1: if petrol ignites straight to vapors, so you know, you

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Speaker 1: can have a bit of an issue there. What I

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Speaker 1: would say to you is if you can try to

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Speaker 1: keep your vehicle above half tank, try to avoid unnecessary travel.

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Speaker 1: If you are going to travel, plan your route, try

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Speaker 1: to see if on that route they are full in

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Speaker 1: stations that have fuel, whether it's s petrol or diesel.

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Speaker 1: Just to make sure that you don't get stuck. You're

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Speaker 1: not in a situation where you need help or you

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Speaker 1: might put yourself into a potentially dangerous situation. But getting

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Speaker 1: stuck in a bad part of South Africa. So try

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Speaker 1: to keep your vehicle above half tank if you can,

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Speaker 1: try to limit unnecessary travel. You know, we don't know

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Speaker 1: how long the situation is going to play out with

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Speaker 1: more currently in Yourn. Well, were going to do what

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Speaker 1: we need to do it. So well, if you're so

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Speaker 1: confident that you've beat us censorships and open up the strait,

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Speaker 1: America is trying to get their allies to come to

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Speaker 1: the party and everybody, and look, we don't want to

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Speaker 1: be drawn into a wall right now. So this is

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Speaker 1: the stand of going on right now. So we are

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Speaker 1: as South Africa, we've opened ourselves up. You know what's

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Speaker 1: so strange is we've we were a country that was

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Speaker 1: fiercely independent when it came to our production, and we've

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Speaker 1: lost that. We are basically we are open to trade

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Speaker 1: winds we as a country because we no longer refine

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Speaker 1: our own product. I mean, we just opened to the markets.

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Speaker 1: We open to all the pricing curves and that can

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Speaker 1: that can send you quickly down a dark road.

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Speaker 2: Right speaking of the trade winds and the pricing curves,

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Speaker 2: the other thing that's kind of doing the rounds at

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Speaker 2: the moment are all kinds of estimations or projections about

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Speaker 2: what the fuel price could be, some of them saying

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Speaker 2: that the fuel price could go up by six rando

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Speaker 2: litera by next month. And I know New twenty four

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Speaker 2: to a deep dive into this, this work to the

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Speaker 2: same Enyji fund that said there is pressure in terms

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Speaker 2: of price, but we're not going to see the kinds

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Speaker 2: of increases that some of the reporting. And again what's

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Speaker 2: opp forwards are claiming talk to us about what's happening

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Speaker 2: with the price, but also just a refresher on how

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Speaker 2: the petrol price and the diesel price is determined in

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Speaker 2: South Africa.

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Speaker 1: So what happens is South Africa because we buy fuel

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Speaker 1: on the open market, we buy in dollars. Fuel is

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Speaker 1: traded in dollars. So when our currency when we lose

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Speaker 1: obviously ground with our currency, I think it was trading

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Speaker 1: below seventeen rands not so long ago. The oil price

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Speaker 1: this morning when I looked for one hundreds and six

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Speaker 1: dollars a barrel. Right, because we've got all of we

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Speaker 1: open to that sort of pressure. Our fuel is, our

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Speaker 1: fuel price is determined by what we can buy the

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Speaker 1: fuel for out in the market. And because it's a

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Speaker 1: projection they've got to project and purchase the fuel at

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Speaker 1: a project the price, and when purchasing the fuel, they've

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Speaker 1: also got to look at Okay, so we purchased fuel

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Speaker 1: today at ninety nine dollars a battle, right, the fuel

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Speaker 1: in when we need to purchase again might be one

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Speaker 1: hundred and six ms a battle. So we've also got

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Speaker 1: to make space for that increase because you've heard them

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Speaker 1: talk about an overrun and an underrun. So what they'll

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Speaker 1: say is, well, when we purchased fuel in January, the

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Speaker 1: price was x, but because we purchased fuel in February

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Speaker 1: at the price, why there's a difference. We need to

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Speaker 1: recover that. Therefore, the price in March might go up

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Speaker 1: three cents or four cents. Or if they've purchased fuel

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Speaker 1: in January at a higher price, February was cheaper there

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Speaker 1: was Now there's now space for them to lower because

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Speaker 1: the price in March, so then they will lower the

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Speaker 1: fuel price slightly. But it's all based on purchasing on

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Speaker 1: an open market, buyingion dollars. And because of that, as

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Speaker 1: you know, South Africa's currencies one of the most volatile

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Speaker 1: in the world. Those fluctuations influence what we pay for fuel.

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Speaker 1: And also we more than half the fuel price is tax.

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Speaker 1: So what you see there is that if fuel is

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Speaker 1: as ten round the leader, basically more than half of

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Speaker 1: that is just tax. The fuel is the other.

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Speaker 2: But right, and so what we're currently seeing at the moment,

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Speaker 2: I guess estimations, projections, but they're not confirmed price changes yet.

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Speaker 1: Yes, son, you yeah, these stories where people are saying

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Speaker 1: diesel's gonna go up eight ran, fuel's gonna go up

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Speaker 1: six rand. Is a story going around that the fuel

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Speaker 1: alsos are ording fuel to wait till the first of

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Speaker 1: April so that when they see the price increase come,

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Speaker 1: obviously they set to make quite a bit of money.

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Speaker 1: But also they're saying that they need that money because

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Speaker 1: they can have to buy at the new price. So

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Speaker 1: the problem is that government's not coming out because again

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Speaker 1: they don't have control the way they use to in

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Speaker 1: terms of our refining capacity. There are a lot of

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Speaker 1: middle men and a lot of traders in the industry,

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Speaker 1: a lot of wholesalers in industry that import their own

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Speaker 1: finished product. Right, So diesel, as you know, is not regulated,

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Speaker 1: so the prices that can supply diesel for government does

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Speaker 1: not regulate that government regulates the price of fuel or petrol,

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Speaker 1: that be ninety ninety five and ninety three. Often in fuels,

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Speaker 1: government regulates that. But diesel is not regulated. Diesel is supplied,

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Speaker 1: it's imported into the country. You've got paraffine, your paraffine

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Speaker 1: which is regulated. You've got gas, which is regulated. So

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Speaker 1: because of all these things, because we don't have refining capacity,

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Speaker 1: but the way we used to, we are more susceptible

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Speaker 1: to price shocks in the market. And as you know,

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Speaker 1: our economy is based on the fact that we transport

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Speaker 1: a lot of our finished goods from port to market,

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Speaker 1: from market to port, and because of that we are

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Speaker 1: holy and wholly. You know, we face those trade winds

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Speaker 1: and we feel it very quickly.

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Speaker 2: Right, But there isn't so this idea that the price

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Speaker 2: is going to just suddenly an unannounced kind of increase overnight.

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Speaker 3: That's not really how our petrol price works.

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Speaker 1: Look, I will say this, if let's say, for example,

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Speaker 1: the war, obviously things get really really bad and there's

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Speaker 1: nothing coming out of that straight the dollar per barrel

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Speaker 1: price might shoot to one hundred and twenty one hundred

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Speaker 1: and twenty dollars per barrel. You know, our cost of

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Speaker 1: fuel will go up in the market because, as I said,

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Speaker 1: we are net importers. We have to buy that fuel

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Speaker 1: on the open market. If our currency depreciates again to

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Speaker 1: where we're seeing levels where it's nineteen round to the dollar,

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Speaker 1: twenty roun to the dollar, there are going to be

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Speaker 1: some price shocks at the pumps because some month's got

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Speaker 1: to pay for it. The government, yes, at one point

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Speaker 1: did tried to subsidize a bit of the fuel heat,

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Speaker 1: but ultimately, at the end of the day, the consumer

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Speaker 1: pays for fuel. The consumer will feel it. When it

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Speaker 1: comes to food. We've already got a foot in mouth

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Speaker 1: outbreak of meat. Beef as expensive, So it's all round.

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Speaker 1: You're going to feel it. You will see it, whether

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Speaker 1: at the pumps or when you go into the stores.

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Speaker 1: You're going to see that.

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Speaker 2: But at the moment, so in the same way that

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Speaker 2: we don't have a national shortage, well, at the moment,

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Speaker 2: as announced by the Department, we don't know what that

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Speaker 2: potential price hike, if there is a price hike on

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Speaker 2: the first of April, we don't know what that looks

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Speaker 2: like at the moment.

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Speaker 1: Definitely, those of us with long memories, well, there was

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Speaker 1: a fuel scandal. In twenty seventeen, South Africa sold off

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Speaker 1: its reserves and the reserves were replenished, but not back

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Speaker 1: to the levels where we had before that, and they

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Speaker 1: were sold at I think they were sold for five

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Speaker 1: billion ran when they were worth a whole lot more.

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Speaker 1: At the time, government is not coming out and talking

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Speaker 1: about that and clarifying that situation in terms of how

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Speaker 1: much we've got available in reserve that is Brent crude

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Speaker 1: oil that is not finished product, so that would have

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Speaker 1: to be refined and turned into finished product and then

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Speaker 1: sold into the market. Previously, South Africa did have about

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Speaker 1: ninety days worth of reserve Brent crude oil in storage

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Speaker 1: and what would happen is they would just change it

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Speaker 1: out periodically just to keep the product fresh. But a

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Speaker 1: large some of that product was sold off at one

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Speaker 1: particular time and because of that, that also opens us

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Speaker 1: up as a country to these shocks, these potential shocks.

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Speaker 3: Warren as always, it is a great pleasure chatting to you.

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Speaker 3: Thank you so much for your time this morning.

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Speaker 1: Thank you for having me.

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Speaker 2: That's our resident merchant enthusiast Tayane Tucker joining us this morning.

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Speaker 2: Day off the WhatsApp groups stop avoiding WhatsApp messages. They

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Speaker 2: just cause a necessary panic coming up doctor triputer And

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Speaker 2: I visited one of the Eat Outwards twenty twenty six nominees,

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Speaker 2: specially un called Embark in Parkhurst, so we'll tell you

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Speaker 2: about it in the Food feature. But first, it is

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Speaker 2: twenty eight minutes before eight o'clock, so let's chicken with

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Speaker 2: your latest eye witness New Sport