Amid allegations that the minister of minerals and energy awarded a Mossgas contract to a company her brother-in-law works for, it has emerged that a breakdown at the Mossel Bay plant is costing state-run PetroSA millions a day.

Amid allegations that the minister of minerals and energy awarded a Mossgas contract to a company her brother-in-law works for, it has emerged that a breakdown at the Mossel Bay plant is costing state-run PetroSA millions a day.


Recently, the Democratic Alliance laid a complaint with the public protector (PP) regarding the contract at Mossgas, which PetroSA awarded to a black empowerment company, Daluxolo Manpower Services.


According to , Vuyani Ngcuka, brother-in-law of Phumzile Mlambo-Ngcuka, minister of minerals and energy, is the non-executive chairperson of the company.


The DA requested that the PP investigate a potential clash of interests between Mlambo-Ngcuka's political function and the awarding of the contract to her brother-in-law as PetroSA falls under the minister's jurisdiction.


"The truth must come out about this elitist enrichment of a family members under the cover of black economic empowerment," Western Cape DA leader Theuns Botha was quoted as saying at the weekend.


Mlambo-Ngcuka's spokesman Kanyo Gqulu reacted by saying that the minister was not involved and played no part in PetroSA awarding the contract to Ngcuka.


But perhaps a more worrying fact for motorists is that the crippled gas-to-liquid plant has been operating far below its capacity for at least three months now and is still running at only about a third of its design capacity.


PetroSA would not give an indication of the financial impact on the corporation at the weekend, but the DA said it was "confidentially informed" that the loss of production at Mossgas could cost as much as R19 million per day.


Apparently, the plant broke down shortly after a maintenance shutdown in June. According to , PetroSA said the breakdown was a combination of technical problems involving corrosion caused by the use of contaminated water to generate steam. The problem would be repaired only later this year.


Although the supply from Mossel Bay constitutes only seven per cent of the national market, the loss of production would result in foreign exchange losses for the country, said South African Petroleum Industry Association director Colin McClelland, as clients would have to increase crude oil imports.


The public prosecutor was also asked to investigate who was responsible for the loss of production at Mossgas because of damage allegedly done in routine maintenance and whether maintenance workers had the necessary skills.


PetroSA recruited the maintenance crew through Daluxolo and another company, Trade Flux.


Meanwhile, the price of petrol is to drop by 22 cents a litre from next Wednesday. The price of unleaded petrol will drop by 21 cents a litre and diesel by between two and five cents.


The reductions follow the strengthening of the rand and a drop in the oil price in the past month. Although this week's announcement by Opec that it intends to cut production by 900 000 barrels a day has sent oil prices soaring, Tony Twine, an Econometrix economist, told it would take a while before the rise in the prices affected local motorists.

Original article from Car