PetroSA, South Africa’s state-owned oil and gas entity, is at the centre of a spiralling scandal involving a tainted fuel deal that has triggered national outrage, left countless motorists with damaged vehicles, and exposed troubling lapses in corporate oversight. What was meant to be a high-yield fuel import venture has instead turned into a costly cautionary tale, now dubbed the R11 billion petrol fiasco.
The High-Stakes Deal That Went Off the Rails
In 2023, PetroSA signed a bold three-year agreement with the obscure and relatively new Nako Energy to import unleaded petrol from the United Arab Emirates. The contract, reportedly valued at R11 billion, projected lucrative returns: PetroSA stood to make 50 cents profit per litre, amounting to an estimated R25 million with every tanker delivery.
But the reality proved far from profitable — or safe. Instead of premium-grade petrol, South African consumers received a product that not only failed to meet quality expectations but also damaged their vehicles.
Dangerous Fuel Hits the Market
By the end of 2023, motorists in areas such as the Garden Route began raising red flags. A new petrol blend, sold under the name Mogas 95, was reportedly staining car paint and leaving unusual residues on fuel pumps. Some drivers were forced to respray their vehicles after suffering visible damage.
Retailers such as Shell, Caltex, Engen, and TotalEnergies soon began comparing notes. Alarmingly, many found the same issue: PetroSA’s supplied fuel was causing engine and cosmetic damage, prompting urgent investigations.
N-Methylaniline: The Chemical Culprit
Scientific testing soon revealed the problem — the fuel had been spiked with N-methylaniline, a chemical octane booster. While it can temporarily make low-grade fuel seem like premium petrol, its downsides are serious: it leads to gummy residue buildup in engines, corrosion, and — as motorists found out — severe damage to car exteriors.
Shockingly, even after learning of these effects, PetroSA proceeded to purchase another shipment worth R634 million, comprising the same substandard blend — a decision that baffled even industry veterans.
Who is Nako Energy?
The company at the core of this debacle, Nako Energy, was only a year old at the time of the deal. Founded by Nkosinathi Ngwenya, who previously worked in mining, the company promised PetroSA access to affordable fuel sourced from Fujairah in the UAE.
However, the fuel in question wasn’t conventionally refined. Instead, it was a chemically blended product — a technique known for cutting costs but fraught with risks if not properly managed. In this case, the method proved disastrous.
Institutional Failures and Oversight Gaps
With over five decades of experience in the energy sector, PetroSA was expected to vet its partners and products rigorously. But instead, the company moved forward with a nearly R700 million “test” shipment of unverified fuel — a gamble that went wrong in every conceivable way.
Internal champions of the deal, including former head of trading Vusi Xaba, described the blend as a “gamechanger.” For the South African public, however, it was nothing short of a catastrophe.
The Fallout: Who Pays?
As accountability questions mount, consumers and taxpayers are left to deal with the consequences. Many motorists have had to pay out-of-pocket for repairs, while public confidence in state-run enterprises continues to erode.
With whispers of corruption, poor due diligence, and regulatory failure in the air, the PetroSA-Nako Energy deal has become a painful symbol of mismanagement — and another hit to South Africa’s already battered reputation for public sector accountability.
A Call for Accountability
The contaminated fuel crisis serves as a stark reminder that oversight is not optional — especially when billions of rands and public safety are on the line. South Africans deserve state institutions that act with diligence and integrity, and private partners that are held to the highest standards. Until then, scandals like this will remain all too common — and costly.
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