Where to fill up with petrol these days is not as easy as it used to be.
In addition to the five dominant multi-national corporations (MNCs), and the black-owned companies such as Exel, Afric Oil and Zenex, recently we have seen Sasol service stations cropping up everywhere like frogs after a torrential downpour.
Last year, Sasol announced that it would end agreements with oil companies and petrol stations that sold Sasol products on their sites.
In December 2003, the Competition Tribunal approved a transaction where Sasol Oil became Exel’s majority shareholder. This decision gave Sasol some outlets to sell its products through Exel service stations.
Its desire to enter the retail market is one of the reasons mentioned for the merger announced in February 2004 between Sasol and Petronas. The proposed merger will give Sasol access to a further 1 250 Engen service stations and bring Sasol, Engen and Exel together.
But Exel and Engen outlets are not enough for big producer Sasol to sell its petrol. It is for this reason that Sasol service stations are mushrooming all over place.
And another company, the state oil company, PetroSA, is also waiting in the wings and figuring ways to offload its product into the retail market.
All of this has led to intense jockeying for market share in the petroleum retail sector.
Market overtraded
But the market is overtraded. According to the Department of Minerals and Energy’s Manny Singh, “30% of South Africa ‘s 4 875 service stations are not economically viable”.
North-West University ‘s Small Business Advisory Bureau estimates that to be viable a garage has to pump 350 000 litres per month.
Government hopes to use the new Petroleum Amendments Act and its system of retail licences to rationalise and make the sector efficient.
This Act forces all wholesalers and retailers of petroleum products such as petrol, gas and paraffin to apply for licences. Current operators have until October to apply.
The Department of Minerals and Energy will then control and limit the number of petrol stations through granting or not granting licences.
Where this leaves the 58 000 petrol attendants, is something to be seen!