PETROSA RUBBISHES CLAIMS THAT IT IS CHARGING ESKOM INFLATED PRICES FOR DIESEL

STATE-owned PetroSA has hit out at claims of charging Eskom inflated prices for diesel. The claims were made by energy expert Chris Yelland and consultancy group EE Business Intelligence, who said in a report that Eskom has been forced to pay exorbitant prices for diesel it buys in bulk from PetroSA, the financially distressed State-owned entity which is its main diesel supplier. PetroSA responded to the claims made in the report authored by Yelland and Mariam Isa to clarify “misconceptions” in the article “Diesel or darkness: PetroSA charges Eskom unfair prices, extracts upfront payments”. PetroSA said: “It is our view that this is a deflection designed to take away focus from the real issues and challenges that our economy has in relation to power generation … It is important to note that the contractual terms between PetroSA and Eskom are based on the basic fuel price (BFP) pricing mechanism.” PetroSA said that this ensured that it sold diesel to Eskom in line with the M-1 BFP. It said Eskom did not purchase any volumes in December 2022 from the oil company, and only requested volumes in January 2023. “This meant that PetroSA was now exposed to a flat price with a huge price exposure to a January 2023 published BFP. The January 2023 BFP dropped by 140 cents per litre) and this drastic drop exposed PetroSA to heavy losses hence the price of volumes sold to Eskom were not aligned to the January 2023 published BFP,” PetroSA said. According to Yelland’s report, “Eskom paid R1.3 billion for this first tranche of 50 million litres of diesel, which translates to an extortionate R26 per litre – about R1 per litre above the retail pump price at which members of the public in Cape Town could fill up their car with just 50 litres of diesel.”

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