1. PARLIAMENTARY PORTFOLIO COMMITTEE - ENERGY
COMMENT ON DRAFT PETROLEUM PRODUCTS AMENDMENT BILL
MAURICE RADEBE
AMEF CHAIRPERSON
18 AUGUST 2003

2. CONTENTS Overall Comments Key Comments on the Bill Conclusion
Prioritize the Objectives of the Bill
Licensing to facilitate HDSA’s
Replacement of the RATPLAN
Regulations are key to success
Key Comments on the Bill
Review of major aspects of the Bill
Conclusion

3. OVERALL COMMENT
The Bill creates the potential for a balanced industry and ensures the managed transition of the oil industry
Prioritize the Objectives of the Bill
Promote HDSA’s - (c) to (a)
Create employment opportunities and develop SMME’s – (d) to (b)
Ensure countrywide availability of fuel at competitive prices – (e) to (c)
Promote efficient petroleum industry – (a) to (d)
Facilitate investment - (b) to (e)

4. OVERALL COMMENT Cont…
If correctly implemented licensing can go a long way in facilitating HDSA empowerment
Implementation of site licensing will replace the current RATPLAN, regulate site development and facilitate HDSA empowerment
Regulations arising from the Act will be crucial in ensuring objectives are met and bring more certainty to investors

5. KEY COMMENTS
Powers of the minister may be perceived to be excessive and possibly open to abuse, however, we do believe that they are necessary to practically manage the transitional process
Potential conflicts with other legislation must be carefully considered
Appeal process should be simple and practical – consider independent review board

6. KEY COMMENTS Cont… Effectiveness of the licensing system is key –
Separate Licensing – renewal and issuing of licenses conditional on BEE credentials – specifically empowerment of women
Definition of “Hold” – property holds site license
Differentiate between “Wholesalers” and “Resellers” – Ensure HSE and retail service station viability
Pricing – at the pump
Storage – costs must not be prohibitive
Vertical Integration – at retail level to promote SMME’s Transitional Licensing – established players must also comply with the objectives of the Bill
Compliance with legal requirements – opportunity and time to comply
Approval before major investment decisions

7. KEY COMMENTS Cont…
The impact on crude and white product transport costs has not been adequately addressed in the Bill
The principle of transport cost neutrality of the Inland refineries need to be carefully considered.
Legislation should provide for the orderly entrance of synthetic fuel producers

8. CONCLUSION
Expedite the passing of the Bill taking into account key issues raised
Commence with drafting regulations and ensure consultation with AMEF in formulating regulations to ensure:
Regulations empower HDSA’s & BEE companies
There is no risk of unintended consequences impacting negatively on HDSA’s and BEE companies
Regulation does not prevent or slow down investment
That we do not over regulate

9. On behalf of AMEF
THANK
YOU