South Africa’s Battle Against Illicit Fuel Trade
Natalie Nyathi
South Africa is facing a major issue in its fuel industry, with widespread contamination and illegal practices costing the government about R3.6 billion every year. The main problem is the illegal mixing of diesel with untaxed paraffin, which not only damages vehicles but also harms the fuel supply chain.
The South African Revenue Service (SARS) has reported high levels of fuel fraud. Many importers are under-declaring the amount of fuel they bring into the country. Some declare as little as 40,000 liters, while investigations show that actual imports can be as much as 60,000 liters. This type of fraud is a big part of the problem.
Regions along the Maputo Corridor, which includes South Africa, Eswatini, and Mozambique, are hotspots for organized crime involving fuel. Criminal networks mix diesel with paraffin sometimes containing up to 68% paraffin allowing them to sell this cheaper, substandard product while making a profit.
Avhapfani Tshifularo, Executive Director of the South African Petroleum Industry Association (SAPIA), has highlighted that blending paraffin with diesel has become very common. While paraffin is meant for household use and should be marked to prevent misuse, criminals have found ways to remove these markers, leading to illegal mixing.
Recent figures show a significant increase in paraffin sales, going from about 600 million liters per year five years ago to around 1.2 billion liters in late 2024. This rise indicates a large amount of paraffin entering the diesel supply chain, often without consumers realizing it, which can lead to costly damage to engines and equipment.
In response to this crisis, SARS is working with various law enforcement agencies to conduct operations aimed at stopping illegal fuel activities. Over the past four months, these efforts have led to the seizure of 953,515 liters of contaminated diesel and assets worth over R367 million. A joint team from SARS and the South African Police Service (SAPS) has identified many key targets in Gauteng, Mpumalanga, and KwaZulu-Natal.
These operations have included random testing of fuel in tankers, revealing contaminated fuel that poses risks to consumers and the environment. The impact of this illegal trade goes beyond financial losses; it threatens the trust people have in the fuel market.
Tshifularo advises diesel users to be cautious, especially when prices at the pump seem unusually low. “Diesel isn’t regulated at the forecourt,” he pointed out, encouraging consumers to buy fuel from reputable places, particularly those linked to well-known oil companies. This can help reduce the risk of getting contaminated fuel.
Despite the challenges, Tshifularo is hopeful about the steps being taken by SARS and law enforcement. “I’m glad to see the authorities addressing this issue,” he said. “We want to work together to tackle this problem.”
As South Africa continues to fight against the illicit fuel trade, a coordinated response is essential. The complexity of this issue requires ongoing collaboration among government agencies, the private sector, and civil society to create a fair and safe fuel market for everyone.
