SA calls for energy sector skills transformation

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The petroleum industry, which is a crucial component of the economy, has little participation by black oil companies, says South African Public Enterprises Minister Malusi Gigaba.

“The petroleum industry is an important and crucial component of the economy in just about all countries, including South Africa. The contribution of the industry to the South African economy is huge,” said Gigaba.

He was speaking at the official opening of the Econ Oil petroleum blending plant in Marble Hall, Limpopo. The plant, which is the first women-owned oil plant, is a product of the South African government economic transformation policies.

Gigaba said that since government’s economic transformation policy was adopted, there has been a change in the structure of the economy.

“This, however, has not changed the patterns of ownership of South African economy in various sectors of the economy,” he said.

He said many black South Africans were excluded from the mainstream industry through, among other instruments, laws passed by the apartheid government, such as the Petroleum Products Act 120 of 1977.

Since reforms made by government, little progress has been made.

“There is still little entry into the industry by Black Oil Companies (BOCs). These companies continue to struggle to increase their market share. There are three barriers of entry in the downstream petroleum industry, namely, economic barriers to entry, non-economic barriers, and cross-sectoral barriers to entry,” said Gigaba.

He said Econ Oil has experienced these market failures and that black women showed resilience and true entrepreneurial spirit to establish the company against all odds.

“The constraints imposed by the industry’s failure to commit to transformation and the financial sector’s unwillingness to support many black entrepreneurs have not deterred the growth of the company.

“They have proven that our economy can build black industrialist who contribute to the creation of decent jobs and the revival of rural economie,” said Gigaba.
Among others, Econ Oil supplied 18% of power parastatal Eskom’s oil needs in a 2003 to 2006 contract.

The plant will start supplying Hendrina Power Station with effect from 1 September 2013.

The plant has created 30 permanent jobs.

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