Concerns are mounting over fuel tampering in South Africa, with industry experts warning that illegal blending practices are becoming increasingly widespread and sophisticated.
At the centre of the issue is the mixing of paraffin with diesel, a practice used to cut costs and boost profits. The process often involves removing or neutralising chemical markers designed to detect fraud, posing significant risks to consumers, regulators and the broader fuel supply chain.
More than 100 suspected illegal fuel depots have been identified across Gauteng, Mpumalanga and Limpopo. According to the International Trade Administration Commission, fuel adulteration is estimated to cost the fiscus around R3.6 billion annually.
Waal de Waal, chief operating officer at Bidvest Protea Coin, said while fuel contamination has long been a concern, the blending of diesel with paraffin and other substances continues to rise.
“There are a few factors that play a role. First of all, the paraffin that doesn’t have a VAT implication is easy to blend with diesel. It gets mixed up to increase the revenue stream because it is freely available,” De Waal explained.
He noted that tax-exempt illuminating paraffin is typically treated with a chemical marker, commonly known as the A1 marker, to help authorities detect illegal blending. However, he warned that detecting such tampering is becoming more difficult.
De Waal said there have been cases where unmarked fuels are mixed with marked products in an attempt to neutralise detection systems.
“South African Revenue Service and the Department of Mineral Resources and Energy use equipment that identifies the marker, but it cannot analyse the full composition of the fuel. The marker can be removed from paraffin and then blended with diesel without detection, which is a major concern,” he said.
He added that a coordinated, multi-agency enforcement approach is needed to effectively curb the practice.
In a related development, SARS uncovered discrepancies last year involving fuel importers who declared shipments of 40,000 litres or less, while investigations revealed actual volumes of up to 60,000 litres, raising further red flags within the industry.