Report from the Democratic Alliance has it that the Department of Energy sold out R5 billion worth of SA oil reserves, without getting permission from Treasury.
According to the party, Minister of Energy, Tina Joemat-Pettersson and Central Energy Fund (CEF) Chief Executive, Sibusiso Gumede violated the Public Finance Management Act (PMFA) by secretly selling out SA’s oil without submitting information to Treasury.
The PMFA states that before a public entity concludes the “acquisition or disposal of a significant asset”, the accounting authority for the public entity must “promptly and in writing inform the relevant treasury of the transaction” and the DA said the sale – which was worth about R5 billion for 10 million barrels – constituted a “significant asset”, which would make the sale a contravention of the PMFA.
According to the party, the sale has left the country vulnerable, with oil in reserve just enough to sustain the country for less than a day. There is supposed to be enough oil in reserve to cover 20 days – which is in itself much lower than the 90 day international average.
“Even worse is that this fuel stock was negligently sold at $28 a barrel when the current price is around $49 a barrel,” the DA said.
“This risk exposure threatens to bring our economy to a complete halt as the economy will not function if South Africans cannot attend work or companies cannot function due to a lack of fuel, the estimated costs have been calculated at R1 billion per day to the economy,”the party added.
The Energy Department however said the sale of the SA oil was a “rotation of unsuitable stock”, which had been done in the past, and can be done without permission from Treasury. But the DA believes it ought to still follow due process.
The party pointed out that under the PFMA, the sale of any significant state asset, which in this case amounts to R5 billion, requires approval from Treasury and it is also stipulated in the CEF Act.
The DA further described the dangers of the sales on the country’s dwindling economy and job creation which the country is trying to wring itself out.
It said:”any form of embargo or fuel shortage will send our exchange rate plummeting and will result in further job losses, we cannot allow this to happen for a second time as we still dealing with the pernicious effects of a trampled currency following the surprise axing of the finance minister in December 2015.”
The DA however said it has requested for a full report on the sale of the SA oil in order to identify the full list of parties involved in the transaction.
It also promised to continue to fight for tax payers money that needs to be accountable, transparent, well managed and aimed at growing the economy in order to reduce the appalling number of 8.9 million jobless South Africans.