Trade and Industry Editor
PETROCHEMICALS and synthetic fuels conglomerate Sasol has hit out at suggestions that it could lose a subsidy on the use of the pipeline which brings crude oil from the coast to its Natref refinery at Sasolburg, which is a joint venture with Total.
Sasol claims that it will not lose any subsidy as it does not actually receive one.
"Natref has not at any time in the past received a subsidy from government or from the motoring public with regard to the transportation of crude oil to the refinery, nor have we requested one now in our submissions to Parliament on the Petroleum Pipelines Bill," said the head of Sasol Oil, Hannes Botha.
He was reacting to suggestions which had been made on Wednesday in Parliament by a top government official Rod Crompton, that Sasol and Total would cease to benefit from subsidised transport tariffs under the Petroleum Pipelines Bill, which is the subject of public hearings in Parliament.
Botha explained that the tariff structure for piping crude oil inland is linked to the cost of transporting refined fuel with a lower price for the crude oil as it then has to be refined. "Regulated fuel prices in the inland area take into account the cheapest cost of shipping refined products such as petrol, diesel and paraffin from the coast to Gauteng."
"These costs would have remained the same, and would have been reflected in the fuel price, irrespective of whether or not Natref production was sold into the interior. If Natref had not been built at Sasolburg, or not been built at all, motorists would have paid exactly the same price for fuel as they are paying at present," Botha said.
"The suggestion that Natref received some sort of hidden subsidy is therefore unfounded."
He further explained that the reason that transport costs for crude oil are lower reflects "the fact that unrefined crude oil will only yield a portion of its total volume as refined product".
Jun 13 2003 06:10:22:000AM John Fraser Business Day 1st Edition
Friday
13 June 2003
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