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This is the appellation given to PetroSA by the journalistic group  “Open secrets”(OS) which, together with Daily Maverick (DM), has opened a can of worms worthy of the worst of scandals, corruption and mismanagement in any of the world’s gangster states. What is astonishing is that the malfeasance surrounding the supply of petrol and diesel to South Africa has been going on for a long time, with nary a serious pushback from the state president nor any parliamentary oversight committee. The story of the perfidious performance of minister of Mineral Resources and Energy’s Gwede Mantashe and PetroSA is so horrendous, and the disbursement of taxpayer’s funds so prolific, that if it were not true, nobody would believe it. The magnitude of the corruption and profligacy surpasses most of the worst spending excesses of the ANC over the past thirty years, with the possible exception of the arms scandal.

“PetroSA’s history is a stark warning of the corruption risks inherent in the murky world of oil and gas. The state-owned petroleum company PetroSA has left behind a litany of scandals that have cost the South African public dearly” says Open Secrets ( 20.11.24) “Few responsible have faced any accountability”.

It is laudable in present-day South Africa, with no Afrikaans national tabloids, and only a relatively small circulation English-language press, that this kind of scandal and wasteful expenditure of public money should be red-flagged by civil groups such as Open Secrets, Ama Bhungane and Daily Maverick. The latter has around 33,000 subscribers. These people, these paying citizens, are supporting an investigative window on ANC shenanigans and malfeasance: at the same time, there is no proper governance whatsoever in terms of oversight and checks and balances with regard to this corruption. Ministerial appearances on television at meetings, speeches made at functions, and vacuous reports with no substance are what the government offers us as leadership, authority and accountability.

The real evil is left to suppurate, and a case in point is the saga of PetroSA. The story of this State-Owned Enterprise (SOE) is a tumultuous one. It is astonishing that local journalist groups such as Ama Bhungane and Open Secrets have, for months now, submitted requests to PetroSA under the Promotion of Access to Information Act (Paia), asking it to name the companies that received roughly R20 billion in contracts to supply it with diesel.  They have been ignored. It has now fallen upon civic organisations such as TLUSA and others to inform the public of this contempt for those who pay taxes and who have in fact financed the apparent skulduggery behind these secret transactions.

It doesn’t seem to worry the ANC government that these requests to expose who is making all the money out of the ANC-controlled petrol and oil business, are ignored. Petro SA has resolutely refused to respond to these requests (DM. 29.10.24). Procurement procedures have not been followed, and nobody in government complains. So who in the ANC is getting rich?  PetroSA treats information requests from civil society “as an annoyance that can be ignored”. (DM 29.0.24)

CONSTANT STREAM OF SCANDALS

“A nearly constant stream of scandals has rocked PetroSA since its establishment in 2002. They have left the entity in complete disarray, with poor governance, mismanagement and corruption tainting all areas of business.” (Open Secrets 20.11.24).  This description can be applied to virtually everything else in the country the ANC has touched. The party is a destructive force, a scourge on the nation.  The warnings years ago when South Africa was handed over to these latent criminals have been vindicated. But being right doesn’t mean you win, as evidenced now by just one example of world class criminality such as has occurred within PetroSA.

It didn’t take long after the establishment of PetroSA for the ANC to dig its grubby fingers into this particular cookie jar.  Shortly after PetroSA  was formed, a company called Imvune won a R750 million contract to supply oil to PetroSA. In 2005, the Mail and Guardian (journalists again!) exposed what became known as the ANC’s “Oilgate”. Imvume was effectively a front company for the ANC which had diverted R11 million from the contract to the ANC’s election fund in the run-up to the 2004 polls.

“In 2013, news stories emerged about a series of irregular payments in less than a year under Petro SA’s acting leadership of one Yekani Tenza. In 2015 – the same year PetroSA reported a R14.5 billion annual loss – Tenza was ordered by a court to repay R83 million to PetroSA due to a series of irregular Procurement Decisions. Just three years later, in 2016, PetroSA was forced to impair R14,5 billion in assets due to a failed gas project called Ikwezi.  The project to drill offshore for natural gas was undermined by continual changes in contractors by PetroSA without proper procurement   processes, and the wells ended up supplying nine times less gas than had been forecast.”

“A forensic investigation into the debacle found that the project was doomed by leadership turmoil, poor governance and a lack of oversight, but PetroSA’s leadership sought to have a parliamentary hearing into this issue and the related forensic report kept secret. These failures have had dire financial consequences. In 2017, PetroSA reported a further R1,4 billion annual loss. The company’s financial struggles accelerated following the closure of the Mossel Bay gas to liquids refinery in 2020.” (OS 20.11.24)

AFRICA INTELLIGENCE

In June 2023, the international political intelligence newsletter Africa Intelligence described PetroSA as an “almost bankrupt firm hobbled by inept management”. In October 2024, the latest CEO Xolile Sizani was suspended “pending an investigation”, just eight months after his appointment. PetroSA executives, as is the case in most of South Africa’s other SOE’s, took home a substantial pay package.  Pragasen Naidoo, CEO between 2020 and2022, earned more than R5 million a year. When he left in 2022, the media reported that Naidoo had been paid out for a significant portion of the three years remaining in his contract, despite PetroSA “needing to borrow money just to pay its employees”. (OS 20.11.24)

PetroSa’s woes have been made worse by the rapid turnover of CEO’s and other senior leadership (sic!) at the entity. “Since 2011, PetroSA has had nine different CEO’s, with seven holding the position in an acting capacity”. (OS 20.11.24)  The crying shame of all of this is that there are numerous skilled, responsible persons with integrity in South Africa who could have made PetroSA a stunning success. Because of the ANC’s huge racial resentment and inferiority complexes, white people were never considered for these jobs. Those who did take the jobs simply stripped the SOE clean. They suffocated the organisation and they threw skilled people who originally worked there under the bus. They were replaced with third rate ANC acolytes who have destroyed what could have been, but will never be, at least until the ANC is ousted from any ruling capacity in a future South Arica. There are none so obtuse as those who do not know they are obtuse. Sane countries seek talented people from all over the world to advance their societies. The ANC has moved in the opposite direction. Sanity has been replaced by a madness, described often as such by columnist Barney Mthombothi in the Sunday Times.

A VENDA BUSINESSMAN

The madness continues. On 11 December 2023, Petro SA entered into a R21 billion deal with a businessman Lawrence Mulaudzi  (a Venda like president Ramaphosa), granting his company  Equator Holdings, the mandate to “fund and rebuild critical gas infrastructure at both the offshore platform that is used to connect offshore gas, to pipelines to bring it onshore, and the part of PetroSA’s Mossel Bay refinery that deals with gas. This deal which fell apart has led to litigation by aggrieved competitors.” (OS 20.11.24)

It is virtually impossible that the president doesn’t know about Muluadzi’s R21 billion tender. Was he qualified and solvent enough to handle this huge and complicated transaction and see it through? Clearly not! Who is Lawrence Muluadzi? Why did the transaction fail? Was Muluadzi brought to book to explain the whereabouts of the R21 billion after the deal collapsed?

PetroSA’s losses have mounted. Between 2017 and 2020, the SOE reported losses totalling nearly R20 billion. It has not released any audited financial statements since its 2020 report. The Auditor General reported the SOE was ”technically insolvent, with its total liabilities exceeding its assets by around R4,5 billion.”

THE ESKOM RESCUE

“A lifeline to PetroSA came from another South African SOE in crisis: Eskom. The electricity supply crisis in South Africa had forced Eskom to enforce daily rolling blackouts coupled with the near constant burning of diesel.” (OS 20.11.24)  Between 2019 and 2024, Eskom spent an astounding R65 billion on diesel. “As one of Eskom’s largest suppliers of diesel, PetroSA was a huge beneficiary of Eskom’s failure, even more so as it was apparently charging a premium.”

At the end of 2022, Eskom requested R1,5 billion from the National Treasury to buy diesel. The Treasury refused and Eskom had to dip into its savings and found R1,3 billion for the emergency procurement of 50 million litres of diesel from stock held by PetroSA. This equated to RR26 per litre, significantly more than the R23,5 it had usually paid. Eskom then paid out another R2,8 billion for more supplies, thus forking out R4 billon to PetroSA for just four months diesel supply. Because   of sales to Eskom, PetroSA made a profit in its 2023/24 financial year.

Says Open Secrets: “Whether or not PetroSA was inflating prices of diesel to Eskom, we have no way of finding out. We don’t know from whom PetroSA was procuring the diesel, and what were the terms. Petro continued procuring diesel in complete secrecy without submitting the necessary deviation reports to the National Treasury. Petro SA has repeatedly denied or flat out ignored Access to Information requests from AMa Bhungane and Open Secrets. Minister of Mineral Affairs and Energy Gwede Mantashe agrees that the secrecy must be maintained and told the enquirers that TRANSPARENCY CANNOT BE ACCEDED TO AS TRANSPARENCY  WOULD ‘KILL’ PETROSA.” ( 20.11.24)

Continues Open Secrets:  PetroSA has a history of abuse of procurement processes and inflation of payments “to allow for kickbacks to the ANC and politically connected business people”. This is easy when the procurement process is secret. In March of 2024, the Auditor General found a further example of this when PetroSA lost more than R11 million selling diesel to a fictitious company. (Does the president know about this? Did he demand details from Mantashe as to who was behind the fictitious company that stole the money?) The National Environmental Management Act (NEMA) requires PetroSA to have enough money set aside to safely decommission and rehabilitate its onshore and offshore operations. In its latest report, PetroSA said it had a shortfall of R9,6 billion, never mind any money to “set aside” A failure to comply with these requirements is a criminal offence  in terms of Nema and is subject to serious sanction. Has any action been taken in this regard?

Years of governance crises and neglect, secrecy and outright corruption have nearly run PetroSA into the ground. The ruling elite is clearly making money out of the secrecy surrounding diesel sales and according to Open Secrets, PetroSA is “an untouchable gem” that has been given lifeline after lifeline. “The political elite still want to use this entity to access lucrative oil and gas deals. They seem willing to go to great lengths to keep the entity going at any public cost.” (OS 20.11.24)

One of commercial farming’s serious input costs is diesel. TLU SA endeavoured to import diesel on a private basis a few years ago but was advised by three different sources that the amount of R7 per litre was added by the ANC to all diesel and other fuel arriving in South Africa, which then held the monopoly for importing fuel. (See the Imvune scandal above).

There are many other costs involved if private groups wish to import fuel for their own account (if they can obtain a licence from the ANC in the first place!). These expenses include storage tanks at the point of disembarkation, the transport of the fuel up country by pipeline, plus further storage depots in the highveld and other inland areas. Licences to import are granted to the Department of Mineral Affairs and Energy to mainly companies that sell both oil and diesel wholesale and retail.

Let us see whether the ANC will answer the media’s request under the Paia Act, failing which legal action must be taken against the government to disclose what appears to have been and still is a gross swindle of taxpayers’ money. The ANC’s hold over diesel imports is strong and it is secret. But the hold must be broken.