LPG crisis hits hospitality industryOctober 24th, 2011 by Andrew Moth | Categories: food, government, hotels, industry, products, restaurants, technology, tourism
South Africa is experiencing a shortage of liquefied petroleum gas (LPG) due to unplanned shutdowns within the local oil refinery industry, the South African Petroleum Industry Association (SAPIA) has confirmed.
SAPIA, the industry body which represents the oil refinery sector, said a number of refineries are currently on planned maintenance shutdowns, and others are on unplanned shutdowns due to technical difficulties.
The Department of Energy has expressed its concerns over the growing shortage, which it says is impacting economic activities.
In a meeting last week on logistics planning by the department, the petroleum industry confirmed that four of the refineries were not in a position to produce LPG.
The department believes that there is a need to accelerate decisions on LPG import infrastructure and to this end the Director-General (DG) of Department of Energy, Nelisiwe Magubane, has already expressed this need in a letter to the chief executive of Transnet.
“There is clearly a need for a long term solution to deal with ageing manufacturing infrastructure”, said the acting DG, George Mnguni.
Temporary import facilities will have to be put in place, particularly in areas where there is no existing import infrastructure.
SAPIA has not given any timelines as to when production from refineries will normalise.
“We have always worked closely with our LPG suppliers but no one could have foreseen the extent of the unplanned shutdowns experienced by South Africa’s petroleum industry,” said Afrox, Southern Africa’s leading LPG distributor.
Afrox says demand is outstripping the company’s limited ability to import stocks of LPG, which faces the triple constraints of the high cost, the dynamics of importing by sea and lack of inland storage facilities.
“The LPG situation in South Africa is having a serious effect on the hospitality, manufacturing and automotive sectors of the local economy. In some parts of the country we have totally run out of product with little prospect of recovering the situation in the immediate term but Afrox continues to engage with all parties in an effort to find solutions for our customers.
“Even importing product has its difficulties, namely the costs involved, uncertain scheduling as it os imported by sea and inland facilities in which to store imported product once landed are limited; these issues make LPG imports a last measure instead of a first response,” Afrox said.