South Africa is facing a growing crisis in its diesel market, with unscrupulous dealers blending tax-free paraffin with diesel and selling it at discounted prices, damaging engines and costing the government billions in lost tax revenue annually.
Avhapfani Tshifularo, CEO of the South African Petroleum Association (SAPA), has warned that this illicit trade is widespread, with syndicates laundering paraffin to remove traceable markers before mixing it with diesel. The fraudulent fuel is then sold to unsuspecting commercial buyers, including transport companies, agricultural operations, and even filling stations.
A Multi-Billion Rand Problem
Tshifularo revealed that paraffin sales have doubled over the past decade, reaching 1.2 billion liters by December 2024—a massive jump from 600 million liters five years ago. This illegal blending results in an estimated R4 billion loss in tax revenue each year.
Authorities, including the South African Revenue Service (SARS) and law enforcement agencies, have intensified crackdowns, with recent raids seizing assets worth R367 million. However, Tshifularo noted that SAPA was not directly involved in these operations, though the industry supports efforts to curb the black market.
How the Scam Works
Paraffin, meant for residential use, is supposed to contain a tracer dye to detect illegal mixing. However, fraudsters have found ways to remove these markers, allowing them to blend paraffin with diesel undetected. The incentive is clear: paraffin is untaxed, creating a R6-R7 per liter profit for criminals.
Consumers at Risk
Tshifularo urged diesel vehicle owners to be vigilant, advising them to question fuel attendants about whether their diesel contains paraffin and if it meets national standards. He also warned that unusually large discounts at certain filling stations could indicate fraudulent fuel.
Government Crackdown
The Department of Mineral Resources and Energy previously found 70 service stations selling adulterated diesel in random tests. While authorities are stepping up efforts, Tshifularo emphasized the need for continued collaboration between industry and law enforcement to dismantle these well-organized syndicates.
As the black market trade grows, motorists and businesses are urged to remain cautious, ensuring they purchase legitimate diesel to avoid costly engine damage and support legal fuel trade.
