Fuel shortages hit one of South Africa’s most important industries

The South African agricultural industry is already struggling with diesel shortages as they prepare for the all-important harvest season this April.

This contradicts statements made by the government earlier this month that South Africa’s fuel supply is stable.

Several industry sourced have reported that farmers do not have sufficient diesel to operate their harvest machinery, which may lead to food supply disruptions and high prices.

A wholesaler in the petroleum sector explained that the shortage has left them unable to meet the full demand from their agricultural clients.

The issue also means that wholesalers are losing revenue because they don’t have enough fuel to sell, reported MyBroadband.

This comes after Mineral and Petroleum Resources Minister Gwede Mantashe told parliament that South Africa’s fuel security is robust despite the ongoing conflict in the Middle East.

The minister also condemned those creating panics over fuel shortages, claiming that the country’s fuel imports were secured until at least mid-April.

Mantashe explained that South African cargo was still allowed through the Strait of Hormuz, provided they did not fly the flags of Israel, the United States, or their allies.

He said that Iran has set specific political conditions for ships passing through the Strait, including a requirement to pay fuel in Chinese Yuan instead of dollars.

This was confirmed by the Iranian ambassador to South Africa, Mansour Shakib Mehr, who recently spoke at an event hosted by the Cape Town Ulama Board.

According to Netwerk24, Mehr claimed that Iran is open to an arrangement that specifically allows South African-bound ships to pass through the Strait of Hormuz safely despite the ongoing war.

Too good to be true

Industry experts are sceptical of Iran’s claims and warned against the practicality of a selective shipping arrangement in an active conflict zone.

Andrew Pike, head of ports, rail, and logistics at Bowmans, expressed doubts over the idea that petroleum products bound for South Africa were being allowed through the Strait of Hormuz.

In an interview with BusinessDay, Pike said he doesn’t know how practical such an arrangement can be truly be.

He also questioned how accurate the government’s claim about the uninterrupted supply is.

“I’m not sure that a ship owner is going to want to go through there anyway if you’ve got mines and things drifting around,” he said.

“Maybe you’re guaranteed of not being hit by a missile, but I don’t know if you can be guaranteed that you’re not going to bump into a mine somewhere along the line.”

Pike said it was highly likely that insurers would impose a massive premium on ships passing through the war zone, regardless of their destination and any arrangements with Iran.

“Those war risk premiums have gone up by a factor of at least six. On a hundred-million-dollar ship, you’re talking about $1.5 million extra,” he said.

“So, I’m not sure how this is going to work. I don’t know how you verify whether it’s South African oil coming through or not.”