The Board of the Central Energy Fund has noted the article in the Business Day of 26th May 2016, titled “Strategic Stock sold off secretly”. We wish to correct the impression created by the article that there are issues based on the misunderstanding of the management of strategic stock. The article makes particular incorrect assertions, which if not corrected may create uncertainty in an already volatile oil market.
We have to emphasise that Strategic Stocks are managed through Ministerial Directives and this case was no different. The notion that the country is put at risk through this rotation is factually incorrect.
We wish to re-iterate that no approval is required from the Minister of Finance (MOF) to sell or rotate strategic fuel stocks.
It should also be noted that when the SFF started the process of the rotation of strategic stocks, the country had 21 days reserves of strategic stocks. After the December 2015 rotation, the country now has access to 90 days reserves which is 30 days more than the required volumes. This allows for South Africa to be able to absorb any market variations and provides a buffer for 3 months in the case of any eventuality.
We wish to reiterate that the integrity of the Strategic Stocks is secured and that the Group will be able to respond to any challenge should it arise.
Mr Tseliso Maqubela, Director, Central Energy Fund, 082 450 9224
Mr Vukani Khulu, Group Stakeholder Advisory Manager, 083 276 3283