Eskom’s application for diesel wholesale licence rejected

As Eskom continues its battle to keep the lights on, the Department of Mineral Resources and Energy has rejected the parastatal’s application for a diesel wholesale licence following its bid to import its own diesel.

The department said it had taken note of news reports titled: “Eskom could save billions with diesel import licence – but De Ruyter says progress with DMRE is slow.”

Requirements

However, the DMRE said Eskom‘s application fell short of the requirements.

“All oil companies operating in South Africa as well as other licensed importers can be approached for supply of diesel to Eskom at competitive prices.

“To import petroleum products directly, Eskom would need a licence, including import infrastructure and adequate storage facilities which they currently do not have.” it said.

No saving

The Energy department said there is no real saving on the diesel price.  

With regards to claims that there is a potential saving of R6 per litre between the Basic Fuel Price and the Wholesale price, the DMRE would like to indicate that the R6 is mainly made up of taxes that the DMRE has no control over.”

“However, if Eskom wants to be exempted from paying taxes which includes the Fuel Levy and Road Accident Fund Levy, Eskom should approach the relevant authorities,” the department said.

Burning diesel

Eskom has been burning millions of litres of diesel to keep the lights on.

Earlier this month, the cash-strapped power utility asked the National Treasury for R19.5 billion to buy diesel to fuel auxiliary power plants.

The utility has been forced to use Open Cycle Gas Turbines that run on diesel, intended to bolster generation during peak-demand periods, to mitigate load shedding that have curbed economic growth and angered frustrated South Africans.

Diesel budget

Eskom this past November said that it did not plan to order any more diesel until 1 April 2023, after exceeding its R11 billion diesel budget by about R1 billion.

This means that for the next few months, it will struggle to afford to run its diesel-powered emergency generation fleet through OCGT power stations.

ALSO READ: No load shedding on New Year’s Eve