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Petroleum Products

On 2 September 1989, Cape Town city centre saw purple. This was not due to any optical illusion or solar refractory phenomenon but because a police water cannon, filled with purple dye, was turned on thousands of supporters of the Mass Democratic Movement in an anti-apartheid protest. The idea was that the police could identify, in the days to come, those present because of the purple stains.1 Dear, oh dear….

Well, poor ol’ purple is not always exploited for such dubious purposes. Actually, it is more a symbol of glory and high status.2 From biblical times, it has coloured the garments of royalty, emperors, nobles, priests and wealthy merchants. Even the ticket to attend the 1953 coronation of Queen Elizabeth II was royal purple, and America’s highest military award, the Purple Heart, bears testimony to the colour’s importance and pedigree.

The reason for this has nothing to do with its beauty. It is because, back in the day, only extraordinarily wealthy people could afford, in effect, purple dye. That is because it was produced, by a laborious and exacting process, from the secretions of a sea snail, and more than 10 000 of the creatures were needed to make just one gram of dye.3 So it was pretty expensive stuff.

That all changed when coal tar came along. This is the tarry liquid which flows from coal (as does gas) when it is heated in order to produce coke. Being almost pure carbon, coke is a highly desirable source of heat for use in metal smelting. Anyway, a pupil at London’s Royal College of Chemistry, one day in the mid-19th Century, was experimenting with coal-tar and dropped a piece of silk into its container. The next morning he found it had turned purple. What was to become a huge synthetic dye industry was born4 – saving all those little sea snails in the process.

There are a host of products that, today, are extracted from, or are by-products derived in part from, coal and coal processing. The World Coal Association refers to ‘thousands’, actually; ranging from fertilisers to hair shampoos, to toothpastes, water filters, nylon and aspirin.5 And, of course, fuel.

In short, this is why Sasol is such a huge and successful company.6 A truly South African company – although now with operations throughout Africa, the America’s, United Kingdom, Europe, Asia, Australia; everywhere, basically – it pioneered coal-based synthetic fuels manufacturing. Sasol is now the world leader in gas-to-liquids and coal-to-liquids technologies, is one of the top ten most valuable companies listed on the Johannesburg Stock Exchange, operates one of the world’s largest underground coal-mining complexes,7 and is the largest corporate tax payer in South Africa.8 But this phenomenon was borne from the success of producing petroleum fuels from coal.

A lot of wars have been fought over oil.9 Its fundamental importance as a national resource, to be closely protected and regulated, is the reason for the Petroleum Products Act 1977.10 The Act is administered by the Minister of Energy.

The Act does not have any specific offences. It simply provides11 that any person who contravenes a provision of the Act shall be guilty of an offence. What follows is an extrapolation of the more obvious provisions.

A. Licences

These are issued by the Controller of Petroleum Products.

  1. You may not manufacture any petroleum fuel or lubricant without a manufacturing licence.12

  2. It is an offence to wholesale prescribed petroleum products13 without an applicable wholesale licence.14

  3. No one may hold or develop premises on land zoned and approved for the retailing of petroleum products (as prescribed)15 without there being a site licence for that site.16

  4. It is an offence to retail prescribed petroleum products without an applicable retail licence.17

B. Business practices

  1. It is a crime to make use of any business practice, method of trading, agreement, arrangement, scheme or understanding (‘business practice’) which is aimed at, or would result in a licensed wholesaler holding a retail licence.1819

  2. You may not make use of any business practice which is aimed at, or would result in self-service by consumers.20

  3. It is an offence for a licensed manufacturer to sell petroleum products to anyone other than a licensed wholesaler or a licensed retailer.2122

  4. A licensed retailer may purchase petroleum products only from a licensed wholesaler or a licensed manufacturer and commits an offence by doing otherwise.23

C. Ministerial notices and regulations

In terms of section 2 of the Act, the Minister can, by regulation or by notice served on any person, regulate or prohibit certain activities and business practices, and prescribe prices and conditions for the buying and selling of petroleum products. These include:

It is an offence to fail to comply with any such regulation or notice.

  1. Wikipedia – ‘Purple rain protest’ https://en.wikipedia.org/wiki/Purple_Rain_protest

  2. See, in general, Wikipedia – ‘Purple’ https://en.wikipedia.org/wiki/Purple

  3. See ‘Mind over matter – The Sasol story: A half-century of technological innovation’, written by John Collings and accessible at www.sasol.com. The publication contributes a fascinating and particularly readable account of Sasol’s history. The information is on page 11. 

  4. Loc cit. 

  5. www.worldcoal.org – ‘Uses of coal’. 

  6. See www.sasol.co.za and also www.fundinguniverse.com – ‘History of Sasol Limited’ for the story. 

  7. www.sasol.co.za – ‘Sasol facts’. 

  8. Wikipedia – ‘Sasol’ https://en.wikipedia.org/wiki/Sasol

  9. www.businessinsider.com ‘Nine wars that were really about commodities’; and more are on their way – www.alternet.org – ‘6 global conflicts that have flared up over oil and gas’. 

  10. As amended; the latest amendment was effected by Act 2 of 2005. 

  11. See section 12(1). 

  12. Section 2A(1)(a). 

  13. These are: aviation gasoline, biofuels, diesel, jet fuel, liquefied petroleum gas, paraffin and petrol. See the Regulations in Government Notice 287 published on 27 March 2006 (as amended). 

  14. Section 2A(1)(b). 

  15. i.e. a ‘site’ in terms of the Act. 

  16. Section 2A(1)(c). 

  17. Section 2A(1)(d). 

  18. This does not apply in the case of wholesalers and retailers of liquefied petroleum gas and paraffin, and also where the practice in question is for training purposes (as prescribed). 

  19. Section 2A(5)(a). 

  20. Section 2A(5)(b). 

  21. This does not apply where the sale is for export purposes. 

  22. Section 2A(6). 

  23. Section 2A(7). 

  24. Section 2(1)(a)i. 

  25. Section 2(1)(a)ii. 

  26. Section 2(1)(a)ii. 

  27. Section 2(1)(b)i. 

  28. Section 2(1)(b)ii. 

  29. Section 2(1)(b)iii. 

  30. Section 2(1)(b)iv. 

  31. Section 2(1)(b)v. 

  32. Section 2(1)(b)vi. 

  33. Section 2(1)(d). 

  34. Section 2(1)(d)i. 

  35. Section 2(1)(e). 

  36. Section 2(1)(f). 

  37. Section 2(1)(g).