department of energy · and retailers of petroleum products prohibit certain actions relating to...
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DEPARTMENT OF ENERGY PETROLEUM COMPLIANCE MONITORING AND ENFORCEMENT
PRESENTED BY: ENERGY INSPECTOR
MR GOMOLEMO MOLOKELE Gauteng( Retsako Game Lodge)
PRESENTATION OVERVIEW
OBJECTIVES OF PPAA
ROLE OF DoE
PETROLEUM COMPLIANCE ,MONITORING AND ENFORCEMENT CHIEF DIRECTORATE
TYPES OF PREVALENT NON COMPLIANCE
CHALLENGES
RECOMMENDATIONS
OBJECTIVES OF PPAA
Promote the transformation of the South African petroleum and
liquid fuels industry
Provide for the licensing of manufacturers (refiners), wholesalers
and retailers of petroleum products
Prohibit certain actions relating to petroleum products
Provide for appeals and arbitration
“Give effect” to the Charter through licensing
Authorise the Minister of Energy to make specific regulations
Thereby ensuring that governance of the liquid fuels sector is in line with Government’s policy objectives
Give effect to policy issues identified in the Energy White Paper
PETROLEUM COMPLIANCE MONITORING AND ENFORCEMENT The mandate is :
“To ensure Legal, Technical and Economic compliance with relevant legislation, specifications, standards and License conditions
Functions
Ensure industry compliance with respect to:
Labeling specifications Record keeping Fuel specification and standards Licensing Conditions of the license Price maintenance Price display
Consult and interact with stakeholders at regional level
Enforce compliance w.r.t PPA
Collaborations
ROLE OF DoE INSPECTOR
The Inspector is responsible for regularly visiting operating business premises at any time to
Carry out legitimate instructions from the Controller
Collect fuel samples and verify whether they meet prescribed Petroleum Products Standards and Specification
Check the validity of licences and compliance to the conditions of licensing including conditional selling of fuel and labelling
Check on any other matter as mandated by the legislation and regulations ( e.g. safety measures undertaken by the licensee)
The inspector is also responsible for checking safety measures undertaken by the licensee.
TYPES OF PREVALENT NON COMPLIANCE Non compliance is reported by public, motorist and
competitors
PRICE MAINTANANCE AND PAYMENT
Overpricing and discounting .
Price change effective on the first Wednesday of each month.
Forecourt prices vary across the country depending MDZ zones coast being the lowest
Retailer margin on fuels is regulated and subject to review from time to time .
Retailers cannot offer discounted prices on petrol
NB. The retailer margin on diesel is not regulated therefore the retailer can sell diesel at a price equal to or higher than the wholesale price
FORMS OF PAYMENT
A retailer must accept payment in the form of cash
A retailer may accept payment card
A notice of the type of payment card must be displayed
If no payment card acceptable a notice to that effect
PROMOTIONS
Free cool drinks, car wash vouchers given to motorist provided that they fill up certain litres of fuel at the site
NB:A retailer may not offer any benefit to a consumer as a result of any sale of petroleum products
VERTICAL INTERGRATION
This refers to a situation where the wholesaler owns the business of the retailer or vice -versa
NB: no person may make use of a business practice, method of
trading, agreement or understanding which is aimed at a licensed wholesaler holding a retail license, except for training purpose
Dual Operations
Illegal operation
LABELLING
Lettering and numbering in standard and solid font , size not less than 55 reading from left to right
Be along side the nozzle and on the same side as the bowser indicating the price
Petrol and diesel dispersed must be the product specified
Metal free unleaded petrol grade(ULP) must be labelled with white lettering and numbering on the green background
Metal containing petrol grade(LRP) must be labelled with white lettering and numbering on a red background
Diesel must be labelled with white lettering on the black
background
Example of Correct Labeling
Correct labelling
What Did We find
FUEL SPECIFICATIONS AND STANDARDS Permitted petrol grades Metal-free unleaded petrol with a minimum RON of
93, 95 Metal-containing unleaded petrol with a minimum
RON of 93, 95
Permitted diesel grades Standard grade diesel (500ppm) Low –sulphur diesel (50ppm)
How do we collect samples
How do we collect samples
RECORD KEEPING
A licensee must keep records of purchase and sale transactions-
Grades of petroleum product purchased or sold
Quantities of petroleum product purchased or sold
Documentation w.r.t. purchase and payment for the batch
Results of any test performed on a batch
Records by which the petroleum product tested can be
traced
Port of entry in case of imported petroleum product
Display of Licences
A retail licence and a site licence or certified copies should be displayed at the business premises in a manner which anyone entering the premises may read it
Temporary licence - this is given to retailer to enable them to operate while DoE is processing the permanent licence application and is valid for 90 days
Annual Submissions
This needs to be done on a yearly basis due date is end February
Any change of particulars in the business can be done within
30 days of the relevant change taking effect , alternatively included on the annual submission for wholesale or retail
PENALTIES FOR CONTRAVENTION
“Any person who is found in contravention of the Petroleum Product
Amendment Act,2003 (Act No 58,2003) shall be guilty of an offence and
liable on conviction to a fine not exceeding R1, 000 000 or imprisonment for period of not exceeding 10 years, or to both such fine and such imprisonment.”
PENALTIES FOR CONTRAVENTION
“Any person who is found in contravention of the Petroleum Product
Amendment Act,2003 (Act No 58,2003) shall be guilty of an offence and
liable on conviction to a fine not exceeding R1, 000 000 or imprisonment for period of not exceeding 10 years, or to both such fine and such imprisonment.”
CHALLENGES
Retailers still not familiar with PPAA
Inspector not able obtain information if the manager or owner is not at the site
Lack of supporting documents and incorrect supply of information when complaints are lodged
RECOMMENDATIONS/CONCLUSION
A licensed manufacturer shall only sell petroleum products to a licensed wholesaler or a licensed retailer, or both, except for export purposes
A licensed retailer shall only purchase petroleum products from a licensed wholesaler or a licensed manufacturer or both
No GIFTS for fuel purchases
Do not develop or construct a site without a licence
Always forward ALL your queries and applications to the Regional office.
Report any illegal operations and illegal activities to the Regional office
BENEFITS OF COMPLIANCE AND ENFORCEMENT Provide more certainty in the petroleum market
Create level playing field for all operators
Promote rule of law and good governance
Protect public health
Ensures fairness and credibility
Increases investors confidence
Create new jobs and markets
