How South Africa Secretly Sold Off Its Oil Reserves … And Got Ripped Off

How South Africa Secretly Sold Off Its Oil Reserves … And Got Ripped Off

From Business Tech

The Department of Energy has sold off R5 billion worth of South African oil reserves, without getting permission from Treasury, the DA said on Thursday.

According to the party, Minister of Energy, Tina Joemat-Pettersson and Central Energy Fund (CEF) Chief Executive, Sibusiso Gumede moved ahead with the sale without submitting information to Treasury, which is a contravention of the Public Finance Management Act (PMFA).

The Act stipulated that  before a public entity concludes the “acquisition or disposal of a significant asset”, the accounting authority for the public entity must “promptly and in writing inform the relevant treasury of the transaction”.

The department said the sale was a “rotation of unsuitable stock”, which had been done in the past, and can be done without permission from Treasury.

However, the DA said that the sale – which was valued at close to R5 billion for 10 million barrels – constituted a “significant asset”, which would make the sale a contravention of the PMFA.

The party said that the sale has left the country vulnerable, with only enough oil in reserve to sustain the country for less than a day. There is supposed to be enough oil in reserve to cover 20 days – which is in itself much lower than the 90 day international average.

“Even worse is that this fuel stock was negligently sold at $28 a barrel when the current price is around $49 a barrel,” the DA said.

“This risk exposure threatens to bring our economy to a complete halt as the economy will not function if South Africans cannot attend work or companies cannot function due to a lack of fuel, the estimated costs have been calculated at R1 billion per day to the economy.”

The DA said it has put in a request to get a full report on the sale, to identify the full list of parties involved in the transaction.

The party said further that if the Auditor General does not take action against the minister and CEF chief, it will push Treasury to pursue criminal charges in the matter.

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