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1 301141 A36220 1 AIDS HELPLINE: 0800-0123-22 Prevention is the cureGovernment GazetteStaatskoerantREPUBLIC OF south AFRICAREPUBLIEK VAN SUID-AFRIKAVol. 573 Pretoria, 8 MarchMaart2013No. The Government Printing Works willnot be held responsible for the quality of Hard Copies or Electronic Files submitted for publication purposes2No. 36220 Government Gazette , 8 MARCH 2013 CONTENTS INHOUDGENERAL NOTICEE nergy, Department ofGeneral Notice192 National Energy Act (34/2008): Draft Strategic Stocks Petroleum Policy and Draft Strategic Stocks ImplementationPlan.

2 NOTICEThe Government Printing Works will not be held responsible for faxed documents not received dueto errors on the fax machine or faxes received which are unclear or incomplete. Please be advisedthat an OK slip, received from a fax machine, will not be accepted as proof that documents werereceived by the GPW for printing. If documents are faxed to the GPW it will be the sender s respon-sibility to phone and confirm that the documents were received in good the Government Printing Works will also not be held responsible for cancellations andamendments which have not been done on original documents received from OF ENERGYDRAFT STRATEGIC STOCKS PETROLEUM POLICY AND DRAFT STRATEGIC STOCKSIMPLEMENTATION PLANThe Minister of Energy, in terms of Section 17 of the National Energy Act (Act of 2008)

3 ,hereby publishes the Draft Strategic Stocks Petroleum Policy and Draft Strategic StocksImplementation Plan in the Schedule hereto, for public of the public are invited to submit to the Minister, within 60 days from the date ofpublication of the notice in the Gazette , written comments to the following address:By post to:The Department of EnergyAttention: Ms Zombango NondabulaPrivate Bag x 96 Pretoria, 0001By fax to: (012) 323 5627 and by e-mail to delivered at: 192 Visagie Street, Corner Paul Kruger and Visagie Streets, 6th inquiries in connection with the Draft Strategic Stocks Petroleum Policy and Draft StrategicStocks Implementation Plan can be directed to Mr Jabulani Ndlovu or Ms Zombango Nondabulaat (012) 406 7520/76 received after the closing date may not be , 8 MAART 2013No.

4 362203 GENERALNOTICENOTICE 192 OF 2013energyDepartment:EnergyREPUBLIC OF south AFRICAD raft Strategic Stocks Petro umPolicy/2Q 124No. 36220 Government Gazette , 8 MARCH 2013 Table of ContentsContents1. and Historical Background of Strategic Stocks Analysis of the Liquid fuels supply Environment in south Geographic Location of south africa in relation to product Logistical infrastructure The role of the Strategic Fuel Fund Bench marking on Strategic of Options to mitigate major supply Revised Strategic Stock Strategic holding Review of the Strategic Stocks Strategic Stocks Storage Procurement, maintenance and management of strategic Location, Monitoring and Drawn down.

5 Trigger and release Financing of Strategic Stoc7. Roles of other institutiohs, Transnet Black Nersa8. Conclusion,ko9. , 8 MAART 2013No. 362205 AbbreviationsCAPEXC apital ExpenditureCEFC entral Energy FundDJPD urban - Johannesburg PipelineDMED epartment of Minerals and Energy-.,DOED epartment of EnergyfDPKDual Purpose Kerosene'-ESSSE nergy Security of Supply Strategy,EWPE nergy White Paper [ White Paper on EnergyPoticiot1998]EIAE nvironmental Impact Assessment,\!EAInternational Energy AgencyIEInternational Energy ProgramGDPG ross Domestic ProductLPGL iquefied Petroleum GasNT\National Energy ReguIr of south AfricaNMPPNew Multi-ProductselineOECDO rganization for Economic Co-operation and DevelopmentPESTELP olitical,conorrk Social, Environmental and LegalPetroSAPetro um',and Gas Corporation of south AfricaRSA)1 south AfricaSFFS ratic Fuel Fund AssociationSOEs,--State Owned Entities\,SSPS trategic Stocks Policy16No.

6 36220 Government Gazette , 8 MARCH 20131 Executive stocks of petroleum products are defined as both crude oil andrefined products (petrol, diesel, jet fuel, and LPG), and are physical in nature,kept for severe fuel supply disruptions or catastrophes. They exclude dead stockin tanks, pipeline fills, refined products in road and rail tankers, stocks hela onbehalf of armed forces, commercial and safety stocks held by operators in thepetroleum infrastructure. Strategic stocks should only become available underdeclared emergencies and should therefore not be used for operational supplydisruptions, short term supply chain problems, as well as bad, plaOrig by theoperators in the oil is only the Minister of Ener9ct thig 'tan declare astate of emergency.

7 Strategic Stocks of petroleum are qq:ilyiliortant componentof any Government policy package aimed at cog with a severe fuel supplydisruption that exceeds the level of commerce,- Istocks coverage. To date,licensed manufacturers and wholesalers operatingin RSA have had noobligation to hold strategic stocks. Strieicks need to be seen in a widercontext than just supply disruptions "T,his is particularly important given thatcrude oil stocks can tie up a large amount of money that has a high opportunitycost in the context of Vdays 'tiew economic imperatives and the limitedresources available to Gov& , the cost of holding strategicstocks needs to be 0149ced against the benefits and the risks faced by south ,sAfrica taking act of the opportunity cost of the frontapolitical risks associated with imports.

8 There are other local risksthat could ``tcatastrophic. The age of our refineries, some of which are over 40/,e;yelts is, a cause for concern because catastrophic events at production facilitiesbartause severe supply disruptions. The current supply disruptions due tounplanned shutdowns caused by amongst others fires at refineries are indicativeof the fuel supply risk country is , 8 MAART 2013No. 362207 Strategic fuel stocks concept and policies are rooted in the 1973-74 oil embargocreated by the Organization of Petroleum Exporting Countries (OPEC)1.

9 Duringthe OPEC's 1973-4 oil embargo, the global supply of petroleum products wasdrastically countries, especially the OECD member countries,keep strategic stocks including developing countries such as China, India White Paper on Energy Policy (1998) (EWP) commits the Soirtn:%iyitanGovernment to secure supply of crude oil and petroleum product tnrough theholding of strategic that " Government 41' 4etermine the,country's strategicoilrequirements and will ensure that su1ply security cognizance of the capacity of its s*thetic fuels industry, south africa will maintain a strategic crude oil stock level equivalent to at leastthree months of total consumption (Section )".

10 The policy has partly beenimplemented by the Government owned ec)sarty, Strategic Fuel Fund (SFF). africa needs to have a compreh4nsive strategic stocks policy which willcover the following:the stocV holding requirements for Government andmandatory stock holding by industry; provision for infrastructure to transport andhold strategic stocks, a funding mechanism for the procurement of stocks andinfrastructure as well as operating and maintenance costs for both. There is acompelling need for south africa to change the current strategic stocks policy soas to enhance the state of readiness in the event of a major oil supply approval of the proposed policy will alleviate the challenges and ensure thatSouth africa has a strengthened response mechanism to oil supply crises.