THE Fuels Industry Association of South Africa is raising the alarm on the persistent issue of diesel adulteration with illuminating paraffin (IP), a practice that it says escalated rapidly since 2019. This illegal activity has not only resulted in significant financial losses to the fiscus, estimated now at more than R3 billion annually, but has also caused equipment failures and market distortions.
In response to this ongoing problem, the Association has put forward a comprehensive proposal to tax marked illuminating paraffin at the same level as diesel. “By applying the full duties and levies applicable to diesel we believe this measure will eliminate the economic incentive for unscrupulous operators to continue this practice. This approach has the potential to bring the illegal adulteration of diesel to a halt,” the Association says.
The Association’s proposal also includes provisions to mitigate the impact on indigent households who rely on paraffin for heating and cooking by recycling the revenue from this taxation back to these households through the South African Social Security Agency grant system. It said that this ensures that the most vulnerable members of our society are not adversely affected by the increased cost of paraffin.
“We are urging the Minister of Finance to seriously consider our proposal. Implementing this taxation policy has the potential to recover billions of rands for the fiscus, funds that are currently being lost due to the illegal blending of IP into diesel. This recovered revenue can be used to support essential public services and infrastructure projects,” says the Association.
The Association says it believes that this approach will not only curb the illegal adulteration of diesel but also ensure that the state recovers the duties and levies rightly due. “It is a practical and effective solution that addresses both the economic and social dimensions of this issue.
The Association made a call to all stakeholders, including policymakers, industry players, and the public, to support this initiative.
The Association represents the collective interests of the South African fuels industry and plays a strategic role in addressing a range of common issues relating to the refining, distribution, and marketing of liquid fuels and transportation energy products, as well as promoting the industry’s environmental and socio-economic progress.
