South Africa's illicit fuel trade is operating on a significant scale, with 188 potential illegal fuel depots identified in Gauteng. These depots are allegedly being used by criminal networks to exploit tax differences and weaknesses in the fuel supply chain. The identification of these depots was made possible through ongoing investigations and intelligence-led assessments by Bidvest Protea Coin.
The private security and investigations company, Bidvest Protea Coin, uses investigators, informants, forensic data analysts, surveillance, and analytical tools to identify crime patterns and trends. According to the company's chief operating officer, Waal de Waal, the 188 potential depots were identified through these efforts. This comes as authorities continue to uncover cases involving the adulteration of diesel, particularly through the illegal mixing of cheaper illuminating paraffin with diesel.
The scale of the problem is reflected in figures from the South African Revenue Service (SARS), which estimates that fuel adulteration costs the fiscus approximately R3.6 billion a year. This is based on statistics from the International Trade Administration Commission. SARS also reports that criminal networks are exploiting fuel imports through under-declaration, with some consignments declared at 40,000 litres or less, while investigations have found that as much as 60,000 litres were imported.
Paraffin is subject to a different tax regime from diesel, creating a financial incentive to mix the cheaper product into diesel before selling it into the legitimate fuel market. SARS has detected a national trend involving fuel-storage and distribution depots, particularly the illegal mixing of diesel with paraffin. In some investigations, adulterated diesel was found to contain up to 68% paraffin.
Criminals have also sought to remove or circumvent chemical markers used to distinguish legitimate fuel products, allowing adulterated fuel to enter the supply chain while making detection more difficult. SARS reported a joint intelligence operation involving 23 targets across Gauteng, Mpumalanga, and KwaZulu-Natal, resulting in the detention of 953,515 litres of contaminated diesel, six non-compliant fuel depots, and assets and contaminated fuel worth about R367.3 million.
The revenue service's 2024/25 annual report recorded a scheme involving the adulteration of diesel with paraffin that caused a R3 billion loss to the fiscus, with assets, equipment, and products detained and criminal cases initiated. Bidvest Protea Coin says the illicit fuel trade involves more than adulteration, with criminal networks also exploiting smuggling and under-declaration across the supply chain.
The company has called for closer cooperation between private security companies, law enforcement, regulators, and businesses to identify criminal networks and protect legitimate operators and consumers. For motorists, the consequences can extend beyond lost tax revenue, as adulterated fuel can affect engine performance and damage vehicles, while legitimate fuel retailers and distributors face competition from operators able to cut costs by using illicitly sourced or adulterated products.
Key points
- The illicit fuel trade in South Africa involves the adulteration of diesel with paraffin, resulting in significant losses to the fiscus.
- 188 potential illegal fuel depots have been identified in Gauteng, highlighting the scale of the problem.
- The issue has significant consequences for motorists, legitimate fuel retailers, and distributors, as well as the broader economy.
