Warning for diesel users in South Africa

South Africa’s diesel black market, driven by the illegal blending of untaxed paraffin and diesel, is costing the government billions and harming consumers.

Concerningly, this illicit diesel is making its way into normal petrol forecourts, potentially damaging unsuspecting consumers and their vehicles.

Avhapfani Tshifularo, CEO of the South African Petroleum Association, explained on Newzroom Afrika that this problem has been growing over a number of years.

Over the past decade, paraffin sales have doubled. Five years ago, roughly 600 million litres were sold annually.

By December 2024, that figure had risen to around 1.2 billion litres. This equates to roughly R4 billion in lost tax revenue.

During a parliamentary sitting back in 2022, Mineral Resource and Energy Minister Gwede Mantashe revealed dodgy diesel was on the rise at petrol stations.

“Those who mix diesel with paraffin and sell to unsuspecting customers must stop this practice,” he warned. “It is illegal. Service stations found with adulterated diesel will face immediate closure and prosecution.”

His warning came as wholesale diesel prices had skyrocketed by more than 50% from 2021 to 2022, News 24 reported.

Tshifularo explained that paraffin, which is supposed to go to the residential market, should be marked with a tracer dye so it can be traced if mixed with diesel.

However, unscrupulous operators have found ways to remove the dye, making the mixture undetectable. They set up large-scale operations to blend paraffin with diesel, which allows them to sell these increased volumes at cheaper prices.

These are usually organised groups that are driven by greed. Since paraffin is not taxed, they can pocket the R6–R7 per litre difference.

According to Tshifularo, this is a problem with diesel across the board. Some operators sell diesel mixed with paraffin to commercial customers like agricultural businesses or transport companies.

These customers buy the diesel without knowing it contains paraffin, thinking it’s a good deal. It also ends up in some garages.

Motorists should be weary

In January 2024, an investigation by the Department of Mineral Resource and Energy revealed that out of 1,000 sampled petrol stations across the country, 70 were selling fake diesel.

These samples, taken from April 2023 to December 2023, revealed that the diesel had been mixed with illuminating paraffin (IP). These petrol stations were identified in the following provinces:

Apart from the losses to the fiscus, Tshifularo said that illicit diesel also damages equipment, vehicle engines, and other machinery that uses diesel as a fuel.

“The purchase of diesel adulterated with paraffin can have serious consequences for vehicles by causing engine damage and, in extreme cases, the write-off of the vehicle. Furthermore, it is also a form of tax evasion, which is illegal.”

He encouraged all diesel drivers to be vigilant and ask tough questions. There’s no harm in asking service station staff whether the diesel they sell contains paraffin or complies with South African national standards.

Forecourt attendants often disclose if something seems off, even if the owner doesn’t want them to. Tshifularo also advised motorists to be vigilant of the prices to check if they are being sold fake diesel.

Since diesel isn’t regulated at the forecourt level, prices can vary. However, if one forecourt offers a discount way out of sync with other service stations on the same street, that should raise a red flag.

Typically, discounts should be pretty comparable to competitors. If one station’s price is drastically lower, it could indicate something isn’t right, Tshifularo added.