Econ Oil wants Competition Commission to intervene in Eskom supply furore

The Competition Tribunal is hearing an application for interim relief from the alleged fuel oil supply cartel, Econ Oil & Energy, whose sole shareholder seeks to interdict and restrain Eskom from refusing to deal with them for ten years.

Econ Oil has been supplying fuel oil to the parastatal since 2001, but was banned and blacklisted from Eskom’s procurement database in March this year.

Fuel oil can be likened to Blitz for a power station; it is used to get coal in the boilers burning.

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In his explosive memoir, former CEO André de Ruyter claimed Econ Oil was part of four criminal cartels fleecing the power utility and likened the company to a mere middleman charging exorbitant amounts for the product.

“The Applicants claim that Eskom’s conduct constitutes a refusal to deal and is an abuse of dominance,” said the Competition Commission.

“Eskom deregistered the Applicants from its database following allegations that they had used improper and unethical means to obtain contracts for the supply of fuel oil to Eskom.”

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Econ Oil is seeking interim relief for six months or pending the final determination of their complaint against Eskom lodged with the Competition Commission (whichever occurs first).

In June 2021, Eskom won a landmark legal challenge to scrap an R8 billion tender agreement with Econ Oil.

Eskom’s lawyers had argued the multibillion-rand tender was “patently unlawful” and clearly contravened key provisions of public procurement policy.

In his early days on the job, De Ruyter was probing why the power utility was preparing to increase the five-year budget for fuel oil by nearly 30% – from R14 billion to R18 billion.

ALSO READ: Eskom won landmark legal challenge to scrap R8 billion Econ Oil deal

“With Eskom already in dire financial straits, blowing R4 billion over your initial budget seemed like a big deal,” wrote De Ruyter in his book, Truth to Power, My three years inside Eskom.

The former CEO believed Eskom should have been buying directly from refineries, such as Total, Engen and Sasol, to save on costs.

In the wake of the damning allegations made against Econ Oil, the company’s sole shareholder and director, Nothemba Mlonzi, clapped back at De Ruyter, essentially accusing him of being on a witch-hunt since his tenure began.

“We believe we’re being unjustly targeted by a system opposed to the success of a black-woman-owned energy company in a predominantly white industry,” said Mlonzi, after the book was released.

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