The Central Energy Fund has defended the\u00a0sale of South Africa’s entire oil reserve, saying that the country’s fuel security hasn’t been compromised as the government still has access to reserves.<\/p>\n
BDLive revealed on Thursday that the department of energy had sold 10 million barrels of South African oil reserves, leaving the country with only 300,000 barrels in stock – enough for less than a day, if an emergency situation arose.<\/p>\n
The Democratic Alliance pointed out that the stock was sold in December at a price of $28 a barrel, totalling almost R5 billion. The party lambasted government’s “negligent” decision, in light of the oil price hitting over $50 this week.<\/p>\n
The State Fuel Fund said that the sale was a “rotation” of old stock, and was something that had happened in the past, and didn’t need permission from Treasury.<\/p>\n
The group spun the news that it had left the country vulnerable through the sale by saying that – actually – it had strengthened the country’s strategic oil stocks by getting first right of refusal from the buyer, in the event of a crisis.<\/p>\n
This means that the country now has access to a larger quantity of crude oil than it originally sold.<\/p>\n
The catch, however, is that\u00a0the country\u00a0would have to buy the fuel back<\/strong>, and at current prices, would make a big loss\u00a0– about R3.4 billion, according to BDLive<\/a>.<\/p>\n On Friday, fuel prices once again pulled below $50 a barrel\u00a0as\u00a0investors worried higher prices could reactivate shuttered\u00a0crude output, adding to global oversupply.<\/p>\n Brent crude\u00a0fell 36 US cents to $49.23, retreating further from the previous session\u2019s $50.51 peak.\u00a0US crude dropped 35 US cents to $49.13 a barrel after touching $50.21 on Thursday.<\/p>\n Government \u2018secretly\u2019 sold off R5 billion worth of SA oil reserves \u2013 and got ripped off<\/a><\/strong><\/p>\n Government makes a move for Absa<\/a><\/strong><\/p>\nMore on the government<\/h3>\n