Sapref production temporarily on hold

THE decision by Sapref Refinery owners to stop operations by the end of March has come as a shock to many as the facility is a major employer in Prospecton. It is also one of the biggest revenue generators for eThekwini Municipality.

Sapref produces 35% of South Africa’s petrol and diesel, and is jointly owned by BP South Africa and Shell Downstream South Africa, who each hold a 50% stake.

In a joint statement, BP South Africa’s CEO, Taelo Mojapelo, and Shell’s country chairperson, Hloniphizwe Mtolo, assured that the decision will not affect fulltime employees. They said the closure will be for an indefinite period, but with a re-start possible in the future, including in the event of any future sale.

“The decision has been taken to allow an informed finalisation on the various options available to the shareholders, a sale option being the most preferred. Until decisions about the future of the plant have been made – including a possible change of ownership – the Sapref shareholders are unable to commit to further investment in the refinery,” read the statement.

Mojapelo said contingency plans are in place to ensure that customers are not negatively impacted and fuel continues to be supplied.

“Over the many decades since its establishment, Sapref has made immense economic contributions at both a local and national scale. For this reason, we continue to pursue the sale of our share in the refinery so that it can continue to advance its legacy as a reliable, safe and productive asset. We remain committed to South Africa through our demonstrated transformation initiatives in the value chain and continue to work with our strategic partners to strengthen our differentiated convenience offers,” said Mojapelo.

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Mtolo said the decision to put operations on hold was difficult to make.

“Shell remains committed to the security of supply to our customers over this production pause. South Africa continues to be a key location for Shell as we progress our growth agenda as an energy provider of choice and a nation builder,” said Mtolo.

Cosatu, however, has said it sees this as proof that big companies are blackmailing the government as the country faces high unemployment. The union’s provincial secretary, Edwin Mkhize, said it was concerning that Sapref owners seem unpatriotic and care only about their own interests at the cost of all those who rely on the facility to make a living.

“We are not convinced by the reasons they have put forward to close the plant. They can’t tell us now they are not making any profit after being in the petroleum business for so many years with fuel prices rising on a monthly basis. We have also noted a growing number of big companies who threaten to shut down if they don’t receive rescue funding from government. In most cases they take those funds and channel them to their off shore interests and the poor workers benefit nothing,” said Mkhize.  

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