The illegal trade of wholesale diesel to retail customers has had dire consequences for the fuel retail industry, Fuel Retail Association (FRA) CEO Reggie Sibiya said on Thursday.

“It is a serious problem. This thing is like cancer [and it] is killing our businesses,” he said during the second day of the FRA Conference, in Johannesburg.

He pointed out that the FRA had given Mineral Resources and Energy Minister Gwede Mantashe an ultimatum to help resolve the situation, stressing that the industry could no longer continue like this.

“What is even more concerning is that people who are actually abiding by the law are becoming victims of the systems.”

Further, Sibiya noted in a press release that the fuel retail industry had "never been at such a crucial crossroad before, with participants having to embrace the future of artificial intelligence, electric cars and green energy – but finding innovative ways to incorporate those capabilities into their operations in what is an ever-changing technological, economic and sociopolitical landscape.”

Another concern, he pointed out, was the rampant conditional selling within the industry, with wholesale licence holders concurrently retailing – despite this being illegal under current legislation.

This presents a challenge for law-abiding retailers who are losing out on sales.

“When these things are not regulated or monitored, they just kill the industry because, next thing, there will be a wholesaler who even sells from their house – it is happening. People are selling diesel in their houses and that volume is supposed to be going to a retail service station,” said Sibiya.

He emphasised that ineffective regulation only worked to disadvantage the growth and sustainability of small, medium-sized and microenterprises, adding that the industry had to unite in taking action.

The FRA would continue to consult key industry stakeholders in the hopes of reaching an amicable solution. Should nothing come to fruition, it would then resort to taking legal action against the Department of Mineral Resources and Energy, said Sibiya. 

“We stand for one thing, equity and fairness in how we sustain our businesses. We have to work together on that one [as] it has been ten years of no joy.”