At a Joint meeting of South African Portfolio committees last year, the Fuels Industry Association emphasised that the Durban Island View Precinct (IVP) petrochemical storage and distribution hub is South Africa’s primary energy gateway and a designated National Key Point.
Operators in the Durban Island View Precinct manage 72% of the country’s imported liquid fuels, including 93% of petrol imports and 71% of diesel imports. They produce and distribute specialised lubricants for mining, heavy industry and manufacturing, and supply supplemental jet fuel to airports nationwide. The Fuels Industry Association highlighted that the South African economy cannot function without a stable and fully operational IVP.
Parliament was briefed on the prolonged uncertainty facing operators under Transnet’s proposed Island View Strategy. The absence of a practical Section 56 implementation plan left long-standing operators on month-to-month leases whilst they still managed tightly integrated infrastructure linking refineries, pipelines, pump stations, berths and storage facilities. This uncertainty disrupted long-term planning and slowed investment.
Investment in the precinct declined during this period of uncertainty. Operators that had invested R2.4 billion in 2018, only invested R1.1 billion in 2019 and approximately R500 million in 2021 and 2022. Despite this decline, sustained operator investment ensured that critical infrastructure remained functional and that national fuel supply security was maintained.
Given the risks to national supply chains, members instructed the Association to apply for a Section 79 Direction from the Minister of Transport. Section 79 empowers the Minister to intervene where South Africa’s national security, strategic interests or economic stability are at risk.
The Direction provides the certainty operators need to maintain and improve infrastructure and, therefore, uninterrupted supply, while ensuring that the port authority reacquires ownership of immovable terminal assets upon agreement expiry.
The Association reaffirmed its members’ commitment to NERSA’s Allocation Guidelines for Uncommitted Capacity, which guarantee transparent and non-discriminatory access to storage and pipeline facilities. Members continue to make uncommitted capacity available to third parties, where feasible, and to work with NERSA to expand access.
Members benefiting from the Minister’s Direction plan to invest R60 billion in operations linked to the IVP and have already contributed approximately R700 million to SMME and supplier development initiatives across their value chains.
The Association will continue to work closely with TNPA, NERSA and the government to stabilise operations at the IVP, strengthen investment, security of supply and local refining capacity, support transformation, and uphold the national interest.
