The impact of the current diesel supply shortages on agriculture has headlined over the past month, leaving many producers with more questions than answers.
Refineries globally were forced into emergency shut down at the end of March 2020 due to a sudden drop in demand as a result of the Covid-19 lockdown. Storage facilities were full, with this situation echoing in most of South Africa’s oil refiners at the time. By end-April, a huge over-supply of all products resulted in vessels not being able to discharge owing to insufficient ullage.
However, this situation transformed overnight with a high increase in demand following the announcement of Level 4 early May 2020, coupled with Sasol’s announcement of its inability to supply other oil companies with their requirements around mid-May.
With most of the supply currently deriving from Durban, massive logistical challenges are being experienced. Fuel availability are being hampered by backlogs and congestions, even as suppliers utilised more road transport in a bid to avert a crisis. As a result, the Transnet fuel pipeline is at this time of utmost importance to supply the inland-regions with sufficient diesel, and agriculture as a whole cannot afford for this lifeline to interrupt supply at any cost, especially due to recent acts of vandalism or theft. Since the lockdown, more than 30 incidents of vandalism or theft has taken place on the pipeline, which hampered supplies to the inland.
Agriculture, as an extensive consumer of petroleum products are facing continuous shortages. Grain- and oilseed producers in the summer grain regions are now busy harvesting and are running very low on diesel, with some already having ran out of supplies. Grain SA have been, and will remain in continuous discussions with the South African Petroleum Industry Association (SAPIA), their members, diesel wholesalers and Transnet regarding the urgency of this matter. Grain SA is assisting with prioritising supply – especially to the white maize crop areas as the biggest contributor to domestic food security and further requested the prioritisation of wholesalers providing diesel to the agricultural value chain.