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Dirty diesel is becoming a big problem in South Africa

The prevalence of contaminated fuel, particularly diesel which has been blended with paraffin, is surging in South Africa, helped by increasingly sophisticated criminal methods and inadequate law enforcement.

Recently, several diesel users across the country, from farmers to suppliers, were left with thousands of litres of unusable fuel after discovering it was polluted.

Similarly, multiple fuel-testing laboratories confirmed to News24 that they have seen a noticeable uptick in large fuel consumers voluntarily submitting diesel samples for testing in 2023 in comparison to 2022 – in some cases, the inquiries have risen by over 38%.

The motivation behind this unlawful practice is monetary gain. Paraffin is not subjected to the sizeable taxes and levies that apply to fuel, and unlike petrol, diesel prices are not regulated, thus allowing filling stations to set their own prices in order to undercut the competition and draw in customers.

Mixing the cheaper paraffin with diesel to increase its volume is therefore an attractive proposition for nefarious station owners who believe they won’t be caught or will be able to plausibly deny any wrongdoing if they are.

An alarming trend

All illuminating paraffin produced in or imported to South Africa is legally required to have a marker, known as the Authentix A1, which is a multi-layered security intervention that indicates when a particular liquid is or incorporates paraffin.

As such, to determine whether a sample of fuel is contaminated, laboratories use a simple test that resembles an at-home pregnancy test to check for the presence of the Authentix marker, and if it’s detected, there is a high likelihood that the fuel is mixed with paraffin.

Attempts to remove or neutralise the marker are unlawful, however, there is an alarming trend emerging that sees criminal syndicates blending paraffin with diesel in neighbouring countries such as Mozambique or Zimbabwe, where the Authentix indicator is not legally required, and then importing those liquids to local stations.

Another approach involves the criminals trying to neutralise the marker with chemicals such as chlorine, though this can rapidly lead to engine troubles and may be more difficult to deny.

While “a few incidences” of dirty diesel in South Africa have been foiled by the multi-layer approach of the Authentix A1 marker, Richard Friend, programme operations manager at Marker Solutions which produces the A1 indicator, said the company has seen an increase in demand from the industry for systems that are able to detect illegal, unmarked paraffin entering the country.

It’s not as easy as it sounds, as it’s not technically required for fuels to be completely free of paraffin. South Africa’s fuel standards dictate that up to 5% paraffin is allowed in diesel to prevent the liquid from seizing, but that anything above 5% would be picked up through testing.

However, there is no legislation that requires testers to check for paraffin or the Authentix marker, rather SANS342 fuel standards seek to ensure fuel does not exceed specified sulphur, density, viscosity, and temperature flashpoint limits – with paraffin usually being picked up in the process.

The syndicates are aware of this gap in the legal framework, and have come up with ways to dilute diesel with paraffin without pushing the other parameters above their legal limits. One test provided to News24 by a laboratory showed that a sample of diesel consisted of 40% paraffin but was still compliant with the SANS342 standards.

These sophisticated methods hint that there is a lot of money on the table in the illicit fuel market, with big players being involved who know how to take advantage of the legal loopholes.

The more frequent occurrence of dirty diesel coincides with an unexplained increase in illuminating paraffin imports.

In 2014, South Africa consumed 558 million litres of paraffin, which doubled to over 1 billion litres by 2021 and continue to rise, according to Avhapfani Tshifularo, CEO of the South African Petroleum Industry Association (Sapia).

This rapid growth in consumption still remains unexplained, with a plausible reason being that a lot of this paraffin is finding its way into diesel. But, since paraffin is essential for cooking, lighting, and heating in many of South Africa’s low-income households, the country’s energy crisis may have also played a role.

The fact that it remains easy to obtain a diesel wholesale licence is exacerbating the issue, said Peter Morgan, CEO of the Liquid Fuels Wholesalers Association.

Many entrepreneurs who are eager to get into the fuel business pay high fees to attorneys for cookie-cutter business plans that are readily passed by the Department of Mineral Resources and Energy.

However, when they struggle to get a foothold in the competitive fuel market, they tend to turn to unlawful practices such as fuel adulteration.

“They start putting up little diesel depots in the middle of nowhere… and when the inspector from the department goes there to investigate, they just shut up shop and move somewhere else. That’s the way this industry is operating,” said Morgan.

The biggest loser

The biggest loser in this entire business of contaminated fuel is the country’s fiscus, which is being robbed of millions in taxes and levies that would be paid on diesel.

Sapia’s Tshifularo said, “there have been several proposals, even from Sapia, in terms of how to go about combatting this issue, but we have just not been getting traction.”

A plausible solution to putting an end to the unlawful practice is to impose taxes on illuminating paraffin, though this is no perfect remedy as it will put more financial strain on the country’s most vulnerable citizens.

A spokesperson from the South African Revenue Services (SARS) confirmed that the issue is receiving “urgent, coordinated, and concerted government response” but did not provide any further details due to the sensitivity of the issue.

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