The South African Fuel Dealers Association says imminent new legislation will have far-reaching implications for the fuel industry and motorists alike.

The South African Fuel Dealers Association (Safda) says imminent new legislation will have far-reaching implications for the fuel industry and motorists alike.

Safda says that BP Southern Africa’s recent announcement that it was the first fuel company to introduce heavy metal-free fuel in the country and Sasol’s plans to merge with empowerment fuel company Exel and establish a joint network 300 service stations by mid-2004, “set the scene for a complete makeover of the fuel-retailing scene next year”.

Even though the new Petroleum Products Amendment Act is still before Parliament, the Act is expected to profoundly affect the entire petroleum industry in a number of ways.

“Most of the stipulations of Act will force significant changes on the fuel retailing industry and have a ripple effect on the rest of the automotive industry. Motor manufacturers are already clamouring for heavy-metal free unleaded petrol and BP SA recently launched the first of these,” said Safda national chairman Gerrie Lewies.

Commenting on the proposed merger of Sasol and Exel, Lewies said: “Petrol retailing will definitively be more competitive but there may not be much of a change in gross petrol sales”.

One of the goals of the Act is to stop the unchallenged proliferation of filling stations, and reported recently that representatives from African Minerals and Energy Forum (Amef), the Fuel Retailers' Association (FRA) and Safda had told the Parliamentary portfolio committee on minerals and energy that the entry of Sasol into the retail market could further complicate the already over-traded fuel retail sector.

The SA Coastal Crude Refineries Association is against the bill's apparent preference for Sasol and government-owned PetroSA when it comes to retail licences because the companies produce 40 per cent of the fuel used in the country. The association represents BP, Caltex, Engen and Shell, which are opposed to a clause in the bill saying licences could be linked to the amount of fuel made in a given area.

However, Lewies said on Wednesday that, thanks to the joint input of Safda and the FRA, the number of new filling stations would be better controlled.

“At least the livelihood of existing dealers will not be eroded by new but unviable filling stations across the road – they will have to be some kilometres apart on national routes. New sites will have to satisfy a host of new stipulations, such as several environmental impact studies and proving their viability.

“They will only have 12 months to comply with these stipulations and also build the filling stations,” says Lewies, adding that Safda will not stand in the way of fair trading and new stations, provided they can prove they are necessary for a community.

Safda national director Johan Coetzee reiterated that fuel retailers wanted to enjoy better profits: “The only way to achieve better profits to the dealer without extra cost to the motorist would be to increase the average throughput of dealers while at the same time ensuring fair and equitable franchise, recognition, supply and rental agreements between fuel dealers and oil companies.

“In no other business sector do investors have such low profit margins. We are pinning our hopes on the new legislation bringing about a better dispensation to fuel dealers”, he added.

Original article from Car