The Fuels Industry Association of South Africa (Fiasa) has put forward a comprehensive proposal to hike taxes on marked illuminating paraffin (IP) to the same level as diesel.
The association believes this will assist in reducing instances of dodgy fuel retailers selling contaminated diesel to their customers.
“By applying the full duties and levies applicable to diesel we believe this measure will eliminate the economic incentive for unscrupulous operators to continue this practice,” said Fiasa.
“This approach has the potential to bring the illegal adulteration of diesel to a halt.”
The proposal also includes provisions to mitigate the impact on indigent households who rely on paraffin for heating and cooking by recycling the revenue from this taxation back to these households through the South African Social Security Agency grant system.
This will ensure that the most vulnerable members of the population are not adversely affected by the increased cost of paraffin.
“We are urging the Minister of Finance to seriously consider our proposal. Implementing this taxation policy has the potential to recover billions of rands for the fiscus, funds that are currently being lost due to the illegal blending of IP into diesel. This recovered revenue can be used to support essential public services and infrastructure projects,” said Fiasa.
“The Association believes that this approach will not only curb the illegal adulteration of diesel but also ensure that the state recovers the duties and levies rightly due. It is a practical and effective solution that addresses both the economic and social dimensions of this issue.”
A 20-year epidemic
Diesel adulteration has plagued South Africa for well over two decades but has seen a resurgence since 2019 as consumers grapple with a sustained cost-of-living crisis.
Marked illuminating paraffin, which is different from aviation paraffin, attracts lower levels of taxes than diesel, and blending the two liquids thus allows fuel retailers to maximise profits.
IP is around R6 per litre cheaper than diesel, enough to make it worthwhile for unscrupulous service stations to take the chance and hope they don’t get caught.
In January 2024, news broke that government had discovered as many as 70 filling stops in the country selling adulterated fuels which once again beckoned calls from industry stakeholders and the public that something must be done to stop the damaging exercise.
The South African Revenue Services together with the Department of Mineral Resources and Energy (DMRE) conceded that they would investigate these occurrences, and the entities subsequently discovered and raided two large fuel depots suspected of contaminating diesel and hiding their tracks.
Fiasa Executive DirectorAvhapfani Tshifularo noted that drivers can be more confident to patronise well-known franchise service stations as they’ve largely been cleared of wrongdoing thus far.
“Most of the [contaminated] diesel is not what you’re going to pick up in a mainstream forecourt or service station, it will be in some dodgy facilities that are not really in the main line,” Tshifularo told Newzroom Afrika.
Another indicator that the product isn’t what it appears to be is if the diesel is “heavily discounted compared to all other marketers in the area,” said the expert.
If you suspect a particular station is selling dirty diesel, Tshifularo recommends reporting them to the DMRE who will send out an inspector to ensure no funny business is taking place.
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