The fuel berth at the Port Elizabeth Port was damaged in June of this year, resulting in industry hauliers having to transport fuel via road from East London to Nelson Mandela Bay.
The Department of Minerals and Petroleum Resources, in response to the additional costs associated with transporting the fuel to the metro, then decided to implement revised transport tariffs in October and November 2024 for petrol, diesel and paraffin for Nelson Mandela Bay and surrounding areas. This resulted in interim zone changes in the affected areas, to allow the industry hauliers to recover their fuel transportation costs.
The Chamber notes that this pricing structure is supposed to be temporary in nature, and once the fuel berth is repaired the area will return back to its former allotted zone. We however estimate that this decision is causing an irrecoverable direct loss to the local economy of approximately R50 million per month. By way of example the October unleaded 95 petrol price decrease was supposed to have been 114 cents per litre but due to the rezoning of Nelson Mandela Bay this price decrease was only 31c per litre, representing a loss of 83 cents per litre.
In November the price of unleaded 95 petrol increased by 25 cents a litre but due to the inland zoning this was increased by 83 cents a litre for consumers in Nelson Mandela Bay. Collectively this means that to date Nelson Mandela Bay consumers have paid R1.66 more per litre for 95 unleaded fuel versus what they would have paid if the area was still a coastal zone. In terms of diesel and paraffin the collective additional amount paid by consumers is also R1.66 more per litre.
In the best interests of our members, consumers and communities, the Chamber took action by filing an urgent review application in October, to gain access to the information which informed the Minister’s decision and have since received the record of decision from the Department.
From the records received it would appear that the Minister did not consider any other options to mitigate the impact of the issue on consumers, but rather focused solutions on addressing the additional transport supply costs and the recovery thereof.
More over we remain concerned, that this potentially creates a precedent for the state to simply transfer its obligations to innocent parties without taking accountability and without regard to the right to administrative justice which is enshrined in our Constitution.
While we have achieved success in putting pressure on the Minister, as well as Transnet to accelerate the repair of the berth at the Port Elizabeth Port and return the metro back to being part of a coastal pricing zone, we are extremely disappointed that consumers and businesses continue to carry additional costs through the fuel price adjustments to fund this. It casts doubt that the berth, which is earmarked to be repaired by the 6 th of December, is on track and potentially may not achieve this deadline. This may mean that the metro may potentially not revert back to its coastal zone pricing status ahead of the holiday season.
As we are a non-profit organisation and do not have the financial resources of the state, the Chamber decided to reach a settlement with the Minister, whereby through a court order it has been agreed that Nelson Mandela Bay will revert back to being part of the coastal zone once the berth is operational again. The Minister was not willing to make this change from early December or January when the fuel price adjustments take place, indicating the low confidence levels in the berth becoming operational timeously.
We are very unhappy with the lack of firm commitment and ongoing approach of punishing Nelson Mandela Bay based consumers and businesses for an issue which is not of their making.
It is the Chamber’s view that the additional costs incurred to date in transporting these fuels into the area by road has been unfairly passed on to businesses, consumers, commuters and local communities. None of these key stakeholders were consulted prior to the rezoning by the Minister. Businesses, consumers, commuters and local communities have been made to bear the brunt of a shipping vessel accident, not caused by them, by paying inflated prices for fuel and indirectly for other goods and services.
It is of concern that the Minister did not adequately consider key regional indicators which reflect that Nelson Mandela Bay is in recession and has amongst the highest unemployment rates in the country. Of equal concern is that consumers and businesses are already reeling from the consequences of the massive municipal utility price increases and other factors affecting the cost of living as well as costs associated with operating businesses.
Find Business Accommodation in Gqeberha HERE
Gqeberha (Port Elizabeth) is a beautiful city located on the coast in the Eastern Cape Province and is known as the “Friendly City”, with other towns in this district including Kariega (Uitenage) and Despatch. Forming part of the Nelson Mandela Bay Metro, Gqeberha has stunning beaches, historical museums and memorials, award-winning wildlife sanctuaries and super friendly people, making it a spectacular holiday destination.
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In 2015, Ran Neu-Ner and Gil Oved sold their business, The Creative Counsel for an estimated R1 billion. The Creative Counsel is the largest advertising agency in South Africa employing more than a thousand permanent staff and tens of thousands of temporary staff every year. The Creative Counsel launched an incubator to support transformation within the industry. Start-ups in media, marketing, digital and mobile industries will receive support and mentorship from the agency\’s management team. In 2017, Ran Neu-Ner pledged R50 million to assist young entrepreneurs develop and grow their businesses. Gil Oved went on to become one of the \”dragons\’ on the South African edition of Dragons\’ Den, as well as one of the \”sharks\’ on M-Net\’s Shark Tank. In 2016, Both entrepreneurs won the EY Southern Africa World Entrepreneur Award for 2016 in the Exceptional category.