Road transport operators appeal for help in South African fuel theft

Road transport operators have appealed to transport minister Dullah Omar of South Africa for help in combatting the theft of fuel amounting to millions of rand each year. Despite the prevalence of fuel theft, either through petrol card scams or by syndicates that drain petrol tankers, there is no national police investigation into the theft.
Each year South African truckers ferry 870 mm tons of goods, including fuel, worth R 2,000 bn. The road freight industry employs 70,000 people and have launched a campaign to clean up the industry. The Scorpions unit, a special investigation unit attached to the national prosecutions office, has at least five major fuel fraud investigations underway.

Convictions were recently obtained in major fraud at Sasol's Secunda plant amounting to millions of rands. In another instance an AngloCoal mine lost R 2,2 mm in a scam at Witbank involving a store man at a mine and a truck driver.
Petrol at R 4 a litre has made it one of the most desirable and easy to steal commodities in the country. Across South Africa are multiple cases of theft ranging from brazen emptying of tankers into underground holds between Zeerust and the Botswana border, to petrol card scams, taxi industry heists and even paraffin being mixed into fuel to increase profits (and wreck your car engine). Thieves have been found filling dustbins with fuel at filling stations late at night and taxis have got away with filling barrels with fuel at depot and racing past security guards and barriers with their valuable loot.

David Parry of British Petroleum who heads the fuel industry Crime and Related Matters working group said fuel theft is a major problem. It involves many intermediaries and companies and cross border syndicates," he said. Engen and Caltex say the situation is "grave." The fuel industry is reluctant to discuss theft believing that it could lead to further losses -- but they are not the only ones experiencing the impact.
Ultimately the consumer pays. South Africa's high taxes on fuel has given some dealers an incentive to buy stolen fuel. Forty % of the cost of petrol goes to tax -- 5 % to the road accident levy, 1 % customs and excise, 31 % fuel levy, 3 % equalisation fund.
A dealer who does not pay tax by purchasing stolen fuel immediately makes at least a 40 % profit. An industry official noted that as an example, in January 2000, a litre of petrol delivered to Gauteng from the coast was 116 cents per litre, but the balance in tax brought the cost up to 292 cents.

A fuel industry official noted, "the volume of fuel sold in South Africa alone was 31 bn litres two years ago -- it is now more. Sixty-five % of that fuel is sold in urban areas. The total turnover is in excess of 1 % of GDP or R 40 bn. And the tax gathered, in 2000 alone, was R 15 bn from fuel sales or 10 % of all taxes collected that year." It is filling stations, big business including the mines, and the road freight industry that carry the largest losses.
Ben Deysel who heads the Road Freight Association and is CEO office of Bulktrans, a major conveyor of fuel says, fuel theft is "very widespread on a national basis, it is severe in mining areas, across borders and on at filling stations." He says that because the theft is often difficult to prove, very little theft is covered by insurance. The costs of fidelity insurance are prohibitive, so most losses are absorbed by the trucking industry.

The RFA met with Minister Omar requesting a combined state and private sector initiative to clamp down on theft and fraud, including exposing those individuals involved in these crimes.
Deysel says: "We have found significant fraud heading north across our borders into the rest of Africa. A huge amount of fuel is conveyed to Botswana, but between its border and Zeerust there are guys with tanks installed virtually next to the road. A tanker pulls off, apparently to rest and delivers 20 000 litres or 10 000 litres into an underground tank then travels across the border and delivers to a fuel company depot, a mine or garage without being caught."