Delay in supply of LPG to hit the most vulnerable
BUSINESSES and underprivileged communities in the Western Cape once again face a shortage of liquefied petroleum gas (LPG) after Vitol last week declared a force majeure to end operations at Sunrise Energy’s import terminal in Saldanha.
In a letter to one customer on June 28, which Independent Media has seen, Vitol wrote that “it is with great regret that, due to unfavourable weather conditions in the port of Saldanha and at the MBM (multibuoy mooring system), our vessels that are scheduled to replenish stock at the import terminal have been delayed and that we were unable to replenish on LPG stock in tank at the facility”.
In the letter, Vitol’s Mariska de Jongh further wrote: “We have no choice but to declare a force majeure pursuant to our agreement with yourselves, since performances of the contract have been greatly affected by said weather conditions.”
Last August, Sunrise Energy’s facility also malfunctioned twice within six weeks, making it unable to take delivery of LPG, because of weather conditions.
Independent Media contacted several businesses this week to see how they had been affected by Vitol’s decision.
Durbanville Gas Centre, on their website, stated that the company would not be accepting any further orders for delivery, because of the closure of the Saldanha-based gas import facility. “We have been notified of an impending gas shortage as a result. We will resume deliveries as soon as possible.”
The owner of Hermanus Gas, Stoffels Frick, said the ongoing monopoly-related issue did not only affect local businesses but also consumers, particularly. “This is our season, winter, a time for consuming gas in the Western Cape. Last week, I had a row of poor people sitting in my driveway waiting for bits and pieces to come in. But I can’t supply all, as I was supposed to get a load in yesterday and only got half of it.
“I supply gas to Hermanus townships to prevent the use of paraffin by making gas affordable for them, for safety purposes. But with the current issue, the poor are forced to go back to paraffin, which means going back to fire hazards, possible burning shacks, and kids with chest problems,” he said.
Frick’s company previously incurred losses of more than R500 000 due to the technical inadequacy of the sole importer of LPG in the province, and last year called on the regulators to make provision for another LPG importer to enable them to continue operating.
Last year, Independent Media reported that the shortage of LPG in the province was a crisis caused by the poor regulation of infrastructure, as well as the inadvertent existence of a monopoly structure pushing prices much higher than they should be.
“Last July, we had exactly the same problem when the buoy broke. This is a money fight and a sick monopolistic thing. My opinion remains the same when I said there is another role-player in the Western Cape who won’t have these problems.
“Sunrise is currently giving the other company living hell to try and get into the market to also bring gas into the Western Cape, and these things are getting out of hand. This matter has a ripple effect, and it is starving the people on ground level. Gas is supposed to be a freely available and cost-efficient commodity, especially to lower-income people,” said Frick.
Another businessperson, who preferred not to be named, said: “This is concerning. We need to have a stable supply, but Sunrise is trying their best to be successful in delaying and challenging the matter and want a monopoly-based supplier in the Western Cape.”
While a tribunal last year said that the Transnet National Ports Authority and Sunrise ganged up on competing LPG importer Avedia Energy, making it virtually impossible for it to operate at the port in Saldanha, the source said: “Avedia must be allowed to continue importing alongside the berth in Saldanha, as this is the only option to avoid the ongoing problems.
“While some vessels are not allowed to enter due to high sea swells, and low visibility, among others, there are other vessels allowed to operate and are not stopped during these times. The question that is key in this matter is knowing that we have shortages and issues for this period, with an effective facility that is currently in place in Saldanha, why do we still have these kinds of issues?
“Sunrise is the cause of what is currently happening, and it should come to an end as they are doing everything to stop other companies, like Avedia, from operating due to wanting to be in control,” said the source.
When approached for comment, Vitol’s head of corporate affairs, Andrea Schlaepfer said: “It is quite common for adverse weather to impact our operations. As and when conditions improve and it is safe to do so, cargoes are discharged.”
Sunrise Energy’s chief executive, Pieter Coetzee, said the company had not received the force majeure notice from Vitol. “We are, however, aware that Vitol was affected by the adverse winter weather conditions at the Saldanha port this week. We understand that the conditions delayed Vitol’s delivery of LPG and that Vitol has accordingly advised its customers.
“Sunrise Energy’s terminal continues to operate optimally. We understand that Vitol is in contact with its customers to provide relevant updates on its supply to them, and further questions should therefore be directed to Vitol,” he said. |