The Fuels Industry Association of South Africa was established in 1994 under the auspices of former president Nelson Mandela to represent the collective interests of the South African liquid fuels industry and to usher South Africa’s vital liquid fuels industry into a new democratic era.
Seelan Naidoo, Chief Executive Officer of Engen Petroleum Limited is the Chairperson of the Fuels Industry Association of South Africa for the year 2024 – 2025.
He is the 26th industry leader to chair the association since its establishment in July 1994.
The Fuels Industry Association of South Africa opened its membership in 2012 to accommodate both existing and potential marketers in the petroleum and refinery market. Membership is available to companies participating in the refining and marketing of petroleum products.
The oil industry is divided into upstream and downstream activities. Upstream refers to the exploration and production of crude oil. Downstream refers to the refining, transportation and marketing of end-user products.
The petrol retail price is regulated by government and changed every month on the first Wednesday of the month.
Under the threat from international oil sanctions in the past, the liquid fuel industry was losing less governmental intervention and regulation.
The Fuels Industry Association of South Africa takes pride in proactively engaging with key stakeholders, providing research information, expert advice and communicating the industry’s views.
For Media queries, please contact
Head Communication: Phila Mzamo
Mobile: 066 423 2319
Email: communication@fuelsindustry.org.za
Industry transformation
The transformation roadmap is defined through the 1998 Energy White Paper , Liquid Fuels Charter, Codes of Good Practice for BEE and the B-BBEE Act of 2003. The Liquid Fuels Charter was created in order to transform the liquid fuels industry to achieve the policy objectives of the 1998 Energy White Paper.
The Charter for the South African Petroleum and Liquid Fuels Industry on Empowering Historically Disadvantaged South Africans in the Petroleum and Liquid Fuels Industry, known as the Liquid Fuels Charter (LFC), was signed by the industry in 2000. It aimed to ensure the sustainable presence, ownership and control by approximately 25% of historically disadvantaged South Africans across the industry value chain by 2010. As the first industry to sign such a charter, Fuels Industry Association of South Africa members prioritised the critical need to correct the imbalances of the past, long before the Broad-Based Black Economic Empowerment Amendment Act of 2013.
The goal of 25% ownership of the South African petroleum industry by historically disadvantaged South Africans (HDSA) is being met by the Fuels Industry Association of South Africa members. All privately owned, integrated members of the Fuels Industry Association of South Africa have concluded transactions, in differing arrangements, to facilitate HDSA ownership of their companies or to assist in the development of qualifying small enterprises. The implementation of the LFC includes much more than ownership. Procurement, employment equity, capacity building and the creation of a supportive culture are also vitally important.
Being the first charter in the country there are some disadvantages for the industry. One of these is that the LFC does not have a balanced scorecard. The concept of balanced scorecards was only developed later and was fine tuned in subsequent charters in line with the 2007 Broad-Based Black Economic Empowerment
The absence of a balanced scorecard has been a distinct problem for the industry. It has meant that all the good results achieved by the industry have been overlooked by critics of the industry and attention only focused on areas where performance has been perceived to be relatively weaker. The industry has never hidden the weaker areas in its performance. Some of these weaknesses are the advancement of women in the industry and the procurement of crude and products from empowered suppliers. To reduce regulatory compliance burden, the industry is working on the alignment proposal of the LFC to the 2013 B-BBEE Codes of Good Practice.
BEE transactions by the Fuels Industry Association of South Africa members
All integrated, privately owned members have concluded equity ownership deals.
Most of these are in respect of 25% of the full value chain, including both refining and marketing. Most are also broad-based and include women’s groups and the community. Good progress has been made with equity participation. Most of the Fuels Industry Association of South Africa’s members have already engaged black partners in either the full value chain or in important parts of it. Most importantly, the international oil companies have equity deals. Multinationals in other sectors of the economy are not entering into broad-based black economic empowerment transactions but rather opting for the Equity Equivalent Investment Programme in terms of the B-BBEE Codes of Good Practice.
Co-operation between the Fuels Industry Association of South Africa and Women in Oil and Energy
In 2005, the Fuels Industry Association of South Africa and Women in Oil and Energy (WOESA) signed a MoU for empowerment of women in the oil and energy sector. The MoU was valid for three years. the Fuels Industry Association of South Africa members individually continued to financially support WOESA. the Fuels Industry Association of South Africa and WOESA worked together to facilitate the sustainable empowerment of women in the oil, gas and other energy sectors. The MoU allowed for two types of relationships between the organisations – one direct relationship between WOESA and the Fuels Industry Association of South Africa and another bilateral relationship between WOESA and individual Fuels Industry Association of South Africa members.
The Fuels Industry Association of South Africa’s assessment of the industry’s achievements to date show that industry is making significant strides in respect of the pillars of the 2007 B-BBEE Codes of Good Practice. However, there are some challenges in the transformation journey which ultimately aims to achieve B-BBEE. These include procurement of crude oil, the need to increase credible B-BBEE suppliers, availability of accredited petroleum industry learning programmes and increasing the representation of people with disabilities.