Johannesburg – It is important to firstly provide context and dispel the misinformation that is being peddled in the media in relation to the Eskom supply of diesel by PetroSA. It is important to note that the contractual terms between PetroSA and Eskom are based on the Basic Fuel Price (BFP) pricing mechanism. This ensures that PetroSA sells to Eskom in line with the M-1 BFP.
Given that PetroSA has a thorough understanding of how the product market works, PetroSA engaged Eskom in October 2022 requesting Eskom to provide us with at least a 3 months forecast for their demand for diesel. This was mainly due to the losses that PetroSA was suffering due to the erratic or spot nature of the nominations of product volumes from Eskom.
We make this point in relation to the importance of providing a minimum 3 months forecast so that there is no pricing exposure and that volumes can be landed at the most favourable terms and price. There is no substitute for planning demand to produce a forecast when it comes to the demand side in the product market, otherwise spot prices will prevail. It is for this reason that PetroSA advises its clients that forecasting and planning are critical to ensure that cargo prices can be locked at favourable terms.
We reiterate that we are under no obligation to share commercial terms entered into between PetroSA and its customers. It is also important to state that PetroSA and Eskom will continue working together to find amicable ways to reduce loadshedding which is caused by high levels of breakdowns and limited emergency generation reserves.
