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Petroleum retailer licensing in South Africa

Do’s, Don’ts and Did you know?

Over the last few years new regulations were introduced to control the number of new filling stations, and conditions under which their development will take place. Previously the opening of a new filling station was limited to a willing oil company, appropriate zoning and a sufficient budget.

Today the Petroleum Products Act (Act No. 120 of 1977) stipulates that all manufacturing, wholesaling and retail facilities for refinery, storage and sales of all liquid fuel products are subject to a site license. Likewise the act also stipulates that all wholesalers and retailers must be in possession of a valid license. This compulsory licensing in the industry was introduced as a measure to control the legislation of authorization regarding environmental assessments, socio-economic assessments, empowerment and new retail sites.

New-to-industry developments face various challenges which do not only include the financing of such a development, but the licensing thereof as well.

It is recommended to appoint a consultant (Call SAPRA 011 886 6300 for consultant details) who specializes in licensing applications as it has been proven to be processed significantly faster, however should one wish to handle such an application on your own, here are some pointers which may assist.

1. The Site and corresponding Retail License needs to be submitted simultaneously.
2. Should both licenses be applied for in the same entity, two separate applications with their own supporting documents needs to be submitted.
3. All supporting documents must be certified.
4. All declarations and application forms need to reach the Department of Energy (now DME) as originals.
5. When submitting documents, request confirmation of receipt from the respective energy officer.
6. Do not wait for the Department of Energy to provide feedback, be proactive and request feedback.
7. Ensure that you attend the site visit conducted by the Department of Energy Regional Director.
8. Make sure that you adhere to the specified timelines given via official correspondence by the Department of Energy.
9. Should you receive an objection, respond immediately to avoid unnecessary time wastage.
10. Always cooperate with the Department of Energy’s licensing officers – most of the time they are merely conveying a message.

Once these licenses have been approved and retailing operations have commenced, the Retail License needs to be renewed annually. An annual submission should reach the Department of Energy by the end of February each year. This application should be accompanied by several documents which includes a compliance plan for the looming Petroleum Liquid Fuel Charter and a schedule on the training provided to employees.

It would assist if the licensee updates this schedule during the course of the year with supporting documents such as invoices, proof of payments and training certificates. The plan needs to set out the licensee’s strategy on how it has and will further align itself and comply with the objectives of the soon to be promulgated Petroleum Liquid Fuel Charter (PLFC) and the affected elements therein. Full details of the PLFC elements, once implemented, will be communicated by the SAPRA Office.

Even though the annual submission has been submitted, the licensee is requested to only pay the annual submission fee upon receipt of an official Department of Energy invoice bearing a unique reference number, on or around the anniversary date of the respective license.