BP’s announcement yesterday that it plans to invest close to R5 billion in South Africa and Mozambique over the next five years in new and on-going infrastructure upgrade projects means South Africa will have clean fuel by 2017 – allowing for the full importation of Euro V-compliant diesel-engined commercial vehicles.
Local vehicle manufacturers and assemblers such Mercedes-Benz South Africa and MAN Truck & Bus SA will undoubtedly applaud this announcement as they have been pleading for cleaner fuel for the last few years. They, as well as leading fleet operators, are keen to bring in trucks and buses with Euro V-compliant engine technology which not only will produce substantial fuel savings, but leave less of a carbon footprint than vehicles with Euro II and III engines being imported at present.
A number of Euro V-compliant vehicles have been on test with retailers such as Woolworths for the past few years, but their range is restricted where 'clean' diesel is available.
The investment will be spent over a number of projects across BP’s fuel value chain, including refineries, terminals and retail network assets.
BP Group managing director and chief executive of Refining and Marketing Iain Conn, said that BP was committed to pursuing operations and investments across Africa. They are looking at pursuing opportunities in Angola, Algeria, Namibia, Libya and Egypt.
It is a sign of BP’s growing confidence in the South African economy as an attractive investment destination especially after the adoption of the National Development Plan (NDP) as the road map for the country.
Earlier this year Minister of Finance Pravin Gordhan undertook to announce the support mechanism for biofuels and upgrade of refineries to encourage South Africa to produce cleaner fuels which are environmentally friendly.
“We anticipate that the remuneration mechanism will be finalised shortly as we have already started to invest in the project and our intent is to be ready to produce clean fuels in 2017,” said Mr Conn.
Part of the investment will go into building and upgrading terminals to world-class facilities, operational integrity and technology, and to ensure greater security of supply.
BP has partnered with Sasol to build the new and recently-commissioned facility at Alrode outside Johannesburg. Once completed, this terminal will be the most modern and technologically advanced in Africa with high safety management systems and standards.
The oil giant has also collaborated with Pick n' Pay to open at least 120 Pick n' Pay Express stores in the next five years across South Africa. This will be coupled with improvements to the BP Express convenience stores.
“This is part of our on-going efforts to be a good corporate citizen as we pursue our business objectives in all the markets in which we operate”, said Mr Conn.
In 2001, BP became one of the first companies to form an empowerment initiative and this has resulted in cash pay-outs to BEE shareholders to the tune of R300 million.
