Minister mops up jet fuel saga

Johannesburg - South Africa's jet fuel inventory shortages "didn't hurt any reputations" this time around, according to an economist.

Tony Twine of Econometrix said: "This time around there was no real knock-on effect, as it was only a retreat in inventories, so fuel was always available."

However, Twine said it was a massive risk for the future: "It could presumably have a sizeable impact on air traffic, if planes cannot get off the ground."

Jet fuel shortages came to the attention of Energy Minister Dipuo Peters this week after reserves at OR Tambo International Airport ran down to two days instead of the historical five.

According to reports, airline companies at the airport have been asked to cut the amount of fuel used by up to 30%.

The saga has resulted in Peters appointing a task team to oversee any future problems arising around jet fuel supplies in South Africa.

The task team will now report to Peters every month to address any emergencies that may develop.

At a meeting held in Pretoria on Thursday, Peters told the media: "The team will investigate the problem and come up with mechanisms that will prevent any future occurrence."

Twine said: "The task team's job, should such emergencies arise, would be to either reshuffle the domestic stock of jet fuel or import from overseas."

By forecasting the demand and supply of jet fuel stock in the country, the team should be able to pinpoint potential problems with a "three- to four-week window" .

Twine said the minister's view was justified as "this is a long-term problem even beyond 2010. The total capacity of our refineries in South Africa can no longer keep up with demand, which means they end up favoring some products coming out of the barrel over others."

Although no flights were delayed this week, Twine warned that the "amortisation in dollars to these multi-million rand aircraft if they were to stagnate on the runway would represent a major cost".

- Fin24.com