Gas supply in the Gauteng area is expected to return to normal over the next few days after a series of mishaps that has throttled supply since the onset of an early winter in May.
Afrox, the market leader in bottled gas, says it has supplied an additional 50 000 9kg bottles to alleviate the shortage and has a further 100 000 cylinders on order, which will arrive in the next two months.
The shortage of gas and cylinders turned out to be something of an own goal for the Department of Mineral and Energy Affairs and Eskom, both of which are encouraging energy consumers to switch to liquid petroleum gas (LPG). It didn’t help that the oil price shot to more than $70 a barrel, dragging the LPG price with it.
Petrol stations across Gauteng ran out of 9kg cylinders when winter arrived earlier than usual and customers started hoarding bottles. Then the Engen refinery in Durban shut down for scheduled maintenance on the understanding that the Sapref, PetroSA and Sasol refineries would pick up the slack. This plan went awry when KwaZulu-Natal-based Sapref, owned by BP and Shell, was forced into an unplanned shutdown, causing further disruption to the supply of LPG.
Collin McClelland, director of the South African Petroleum Industry Association, says LPG availability is returning to normal. “The larger distributors of LPG are telling us that they have supply and are shipping it out, so I expect we’ll be back to normal over the next few days.”
Local refineries produce about 400 000 tons of LPG a year, which is equivalent to 2% of their refining capacity. Margins are roughly the same as for petrol, and any increase in LPG production comes at the expense of other liquid-fuel products.
Local refiners are likely to find themselves under pressure to meet growing demand for LPG in the years ahead as the government and Eskom continue their efforts to get consumers to switch to gas to alleviate strain on the national electricity grid.
Because increased LPG production comes at the expense of liquid fuels, South Africa may have to consider importing gas to meet local demand in the future.
One of the problems facing the LPG industry is the lack of coordination between refiners and Eskom, which attempted to solve the electricity supply problem in the Western Cape by replacing 100 000 two-plate stoves and 25 000 electric hobs and ovens with LPG-fuelled equivalents.
Rick Hogben, MD of Afrox, says that although the gas shortage is coming to an end, Afrox will have to prioritise business customers who are mainly supplied in bulk or 48kg cylinders. “Afrox has done everything it can to move supplies around the country and ensure that its customers are kept supplied to the greatest extent possible. This has been a costly exercise,” he says.
McClelland says there is an LPG Supply Forum, chaired by the department, which attempts to coordinate supply within the limitations imposed by competition legislation. Eskom is not part of the forum, which now appears to be a source of concern. Its gung-ho approach to LPG conversions appears to have aggravated the supply problem in the Western Cape, where it was forced to shut down its Koeberg nuclear plant earlier this year.