South Africa’s illicit diesel trade is growing and posing an increasing risk to unsuspecting drivers as it creeps into more petrol forecourts.
A key indicator of this is the rapid rise in paraffin sales, with annual sales figure reaching 1.2 billion litres by December 2024 from only 600 million litres in 2019.
Paraffin is essential in the illegal diesel trade as criminals mix it with the stolen diesel and then sell the product as compliant fuel.
Since paraffin is taxed significantly lower than diesel, unscrupulous station owners enjoy a larger profit margin for the adulterated fuel.
In a 2022 parliamentary sitting, Mineral Resource and Energy Minister Gwede Mantashe commented that adulterated diesel was becoming more common at petrol stations, warning as well that stations found with such fuel would “face immediate closure and prosecution”.
An investigation later conducted by the Department of Mineral Resources and Energy in January 2024 confirmed his warnings, as out of 1,000 sampled petrol stations, 70 were selling adulterated diesel.
While this costs the state billions in lost revenue, it also poses a significant danger to drivers.
“The purchase of diesel adulterated with paraffin can have serious consequences for vehicles by causing engine damage and, in extreme cases, the write-off of the vehicle,” said Avhapfani Tshifularo, Chief Executive of the Fuels Industry Association of South Africa.
He also noted that the faulty fuel could be used as a form of tax evasion.
Tshifularo has advised all diesel drivers to be vigilant and ensure the fuel they buy is compliant, such as by asking petrol station attendants if their fuel contains paraffin.
Usually, attendants will be honest if something is off with the fuel, even if the station owner has told them to keep quiet.
Monitoring for unusually low prices is also a method of potentially detecting such fuel.
While diesel isn’t regulated at the forecourt level, a distinctly lower price usually indicates illicit activity as stations generally keep their prices and discounts in a similar range.
Long-term solutions to the issue
The Fuels Industry Association of South Africa has advocated for a strong response to this issue for many years, with Tshifularo strongly recommending harsher rules.
“These actions reinforce the urgent need to eliminate criminal syndicates that exploit regulatory loopholes, engage in fuel smuggling, and adulterate diesel primarily through the illegal mixing of diesel with untaxed paraffin,” he said.
Based on this, the Association has consistently recommended a zero-tolerance approach focusing on eradicating the adulterated fuel supply chain.
“A key pillar of our long-standing position is the elimination of the incentive to adulterate diesel with paraffin. To this end, the Association has strongly advocated for the alignment of paraffin taxation with diesel taxation levels,” he said.
Such an alignment would bring paraffin taxation in line with diesel and would remove the profit margin the adulterated fuel sellers currently enjoy.
Recently, joint operations conducted by SARS and the National Joint Operational and Intelligence Structure (NATJOINTS), seized nearly two million litres of adulterated diesel.
The operations also saw the closure of non-compliant depots and the opening of multiple criminal cases across Gauteng, Mpumalanga, and KwaZulu-Natal.
While this is good news, as long as the profit margin incentive remains illicit fuel will continue to pose a risk to South Africans.
Diesel drivers should therefore stay alert and cognisant of the risks posed by adulterated fuel.
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