Under-fire CEF to pay staff over R41m in bonuses

Cape Town – The Central Energy Fund (CEF), which is responsible for overseeing PetroSA and the Strategic Fuel Fund, will pay more than R41m in bonuses to its staff members in the 2015/16 financial year. 

The CEF, which briefed Parliament’s Portfolio Committee on Energy on Tuesday, responded in writing to some of the questions MPs posed to them at the briefing. 

In its written response, the CEF said besides the R41.995m bonus provision in the current financial year, the fund also paid bonuses in excess of R193m in the 2014/15 financial year.  

This bonus provision took place in a financial year in which PetroSA made a loss of R14.5bn.

The CEF came under heavy criticism from MPs for the state of affairs at its subsidiaries, especially PetroSA and the Strategic Fuel Fund.

The Strategic Fuel Fund controversially sold off 10 million barrels of crude oil without Treasury's permission, making an operating loss of R215m in the 2015/16 financial year.

PetroSA managed to limit its financial loss in the current financial year to R449m, but faces a funding shortfall of R8.8bn relating to a provision in environmental legislation that requires companies to have upfront funding available for abandonment, decommissioning and rehabilitation in the event of a plant shutdown.

PetroSA’s cash reserves only make provision for R1.9bn of the estimated R10.7bn requirement.  

In its written responses, the CEF further said that South Africa’s strategic fuel stock reserves currently stand at 60 days, “based on third party stock held in the Strategic Fuel Fund’s tanks”.

“When the market conditions are favourable, the stock will be replenished,” the CEF said. It also confirmed that the 10 million barrels of crude stock that had been sold off earlier are still in the fuel fund’s tanks.

The CEF said the preliminary results following the investigation into the controversial crude oil deal are expected to be made available in the second week of December this year. 

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