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Acknowledgment

First and foremost, I would like to take this opportunity to thank my mentor and

boss, Ms Candy Stromvig for her great support and contribution that she had

established and harnessed me with in-service training and work experience, and

for providing with such profound methodologies compiling on this report.

Secondly, I would like to thank Mr Mfanibela Mkhonta (Chevron Depot Manager),

Mr Mamba (Engen Depot Manager), Mr Welcome Dlamini (Total Depot Manager)

and Mr Thulani Radebe (Galp Depot Manager) for helping and giving me the

platform to not only be exposed to fuel oil industry but also for further assisting me

with all factual depot operations and information.

Thirdly many thanks also to Mr Thokozani Mvubu, the Ministry Fuel Laboratory

Manager for also providing me with cutting edge laboratory technology exposure

and tests.

Lastly, I would also like to acknowledge my work colleagues at the Ministry of

Natural Resources and Energy for their great aid and advises; it is my genuine

pleasure to acknowledge their contribution.

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Declaration

I, Mr Mangaliso, Kwanele Msibi student number 209135832 and Passport number

40001242 declare that this is my own original work and I am fully aware of the fact

that, in the event of false information being provided, this report shall be cancelled

and, I furthermore declares that I am prepared and ready to submit it to the

Faculty of Science and Technology in the Department of Chemical Engineering for

National Diploma.

Signature (Student) ______________ date _________________

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Table of Contents Page

Acknowledgment ________________________________________________________________ i

Declaration ____________________________________________________________________ ii

Table of Contents _____________________________________________________________ iii

List of Figures __________________________________________________________________ iv

List of Tables ___________________________________________________________________ v

FUEL OILS VOLUME MONITORING AND STORAGE

1. Introduction _______________________________________________________________ 1

2. Literature Review___________________________________________________________ 3

3 Equipment Design and Description ________________________________________ 10

4 Results and Finding _______________________________________________________ 17

5 Discussion ________________________________________________________________ 21

6 Conclusion ________________________________________________________________ 23

7 Recommendations _________________________________________________________ 24

8 References ________________________________________________________________ 25

9 GLOSSARRY ________________________________________________________________ 26

10 Appendix A (Extras) ________________________________________________________ 27

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List of Figures

Figure3.1.1 Engen Storage Depot Flow Diagram ................................................... 11

Figure3.1. 2 Positive Displacement Rotary Gear Pump .......................................... 12

Figure 3.1.3 Gate Valve......................................................................................... 13

Figure 3.1.4 Globe Valve ....................................................................................... 13

Figure3.1. 5 Plant Layout .................................................................................... 15

Figure 4.1.1 4th Quarter 2015 Import Volumes Graph .......................................... 19

Figure 4.1.2 4th Quarter Fuel Import Volumes Company Import Market Share ..... 20

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List of Tables

Table 3.1.1 Process Flow Diagram Technical Key .................................................. 19

Table 4.2.2 Compartment Dipping Calculation ..................................................... 19

Table 4.2.3 4th Quarter 2015, Import Volumes ...................................................... 19

Table 4.2.4 4th Quarter, Fuel Import Volumes Company Import Market Share ...... 20

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FUEL OILS VOLUME MONITORING AND STORAGE

1. Introduction

For my P1 training, I had been doing an attachment with the Ministry of Natural

Resources and Energy and in liaison with the Petroleum Fuel Storage Depots in

Swaziland. During my training, part of my work was working towards fulfilling the

Ministry‟s mandate of: Monitoring Petroleum Fuel Volume into the country through

railway and road importation. Amongst the specifications envisaged by the Ministry

through fuel volume monitoring was: Fuel Quality and Assurance, and Safety

Storage and Transportation. To ensure that the fuel oil companies are in

compliance, the Ministry carries out scheduled quarterly inspections, randomly

within the Kingdom country at the various fuel oil companies‟ filling stations and at

their respective fuel storage depots. Basically what happens is the fuel oil

companies import fuel from neighbouring countries which are: South Africa and

Mozambique; these fuel oil companies have a storage depot, where the fuel is

stored and thereafter distributed across the country to various stakeholders.

Swaziland is a non-producer of petroleum products, hence all fuel consumed in the

country comes solely from fuel imported by fuel oil companies as mentioned above.

Through the Ministry of Natural Resources and Energy and other Ministries, fuel

importation into the country is regulated, legislated and controlled. The designated

fuel oil companies in Swaziland to distribute fuel are: Chevron, Engen, Caltex,

Total, Exel, Galp Energia, Swaziland Independent Oil Investment, Afri-son Oils (Pty)

Ltd and Trans Lubombo.

So far what I had been tasked to do is to monitor the fuel petrol, diesel and paraffin

imports and sales volumes into the country. Perform fuel inspections on

commercial border posts, on fuel filling stations, fuel depots and on commercial

distributing sites. Then carry out laboratory work, run tests of the fuel to

determine properties such as sulphur content, octane number, flash point,

moisture content, viscosity etc. Subsequently co-compile a report, based on the

results of the laboratory tests and inspection assessments. Report to the various

clients, stakeholders and when required, also to authorities, and to other

Ministries.

Swaziland relies on fuel imports from South Africa, mostly to meet its transport

sector needs. One of the Swaziland‟s Government key priorities is to ensure a

secure and resilient fuel oil at affordable price to the country is supplied. The fuel

oil importers into the Kingdom play a critical role in providing fuel oil products that

is of great importance to the economy of the country and way of life.

There has been a steady transition from importing to domestic production to

reduce the high costs of fuel oil imports. In light of this the Department of Energy,

Ministry of Natural Resources and Energy working with other Departments,

stakeholders and agencies has reviewed the imports sector in the Kingdom to

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assess whether steps are needed to maintain secure and resilient fuel supplies. The

Swaziland‟s Government through the Ministry and other agencies has also

embarked on a number of plans to meet the fuel demand in the country. Such

projects include the developing of a Strategic Fuel Storage at Phuzumoya; which is

a fuel oil storage depot, set to sustain the State fuel oils with a holding capacity for

3 months without fuel importation into the country. This proposed new Strategic

Fuel Storage at Phuzumoya is expected to increase the holding capacity by 90 000

Kilo-Litres holding capacity. The Ministry has also piloted a biofuel (ethanol-petrol)

blended fuel production.

The overall objective of this report is to provide the Institution with my factual

results, statistics pertaining fuel volume monitoring and also narrate about my

industry exposure with reference to the fuel oil depot storage in Swaziland; and

also tells about the processes and experiments I had encountered.

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2. Literature Review The Depot is simple batch operated petroleum storage without production process

though. Batch processes are designed to operate intermittently. With either all or

some of the process units being frequently shut down and started up. Larger fuel

oil refineries depots are designed to operate 24 hours a day, 7 days a week,

throughout the year, receiving and processing fuel oils on continues basis. Some

down time is allowed for such depot plants maintenance and, for some cleaning

processes. For larger fuel oil refineries continuous processes are usually more

economical for large scale production. Batch processes are used where some

flexibility is wanted in production rate or product specification.

Ordinarily for fuel oil storage depots refineries or terminals have approximately

capacity of 90 to 100 million Kilo-Litres of barrels of crude oil. One of the major

concerns is the environmental impact of a fuel oil spill and fire. Therefore they are

several factors need to be investigated: type of fuel oil spill, causes of a fuel oil spill,

costs for clean-up and hearing, and ecological damage. One prevalent trend in the

causes of fuel oil spills is human error and equipment failure. Another trend is that

ecological damage is lessened when the spill is small and clean-up is quick and

efficient. The design should address these factors. The type of fuel oil is also very

important when considering the effects of a fuel oil spill. Lighter fuel oils can be

cleaned up more easily than heavier fuel oils. The cost for clean-up depends on the

amount spilled and the time delay before clean-up.

2.1 Plant Layout

2.1.1 Location of Fuel Oil Depot

According to Scottish Environment Protection Authority, factors to be considered before deciding where to build a depot must include: environmental and fire protection, access, and maintenance and security requirements where to put new storage fuel oil tanks. It is recommended that storage depots tanks are not placed on high risk locations; these are: It must be 50 metres away of a spring, well or borehole; It must be 10 metres away of a watercourse; places where spilt fuel oil could

enter open drains, loose fitting manhole covers or soak into the ground where it could pollute groundwater;

Places where a spill could run over hard ground to enter a stream or soak into the ground where it could pollute groundwater;

2.1.2 Regulations

Bunding is a legal requirement in many countries particularly around tanks,

storage vessels and other plant that contain liquids which may be dangerous or

hazardous to the environment. Particular examples which receive specific

attention in the Europe, the rest of Africa and the Asia are fuel oil and fuel

storage tanks.

2.1.3 Bunding/Liquid containment

Fuel oil spills is among the most common pollutants at depots and adversely to the

environment. Cleaning up fuel oil spills can be difficult and expensive. Hence it is

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of great importance to construct proper preventive measures for fuel oil spills as

well as provide extensive staff training with regards to fuel oil spills.

As defined by the South Australian Environment Protection Authority, bunding is

type retaining wall constructed around storage tanks, used to prevent the liquid

from causing damage either by force or its chemistry; where potentially polluting

substances are handled especially fuel petroleum fuel oils, processed or stored, for

the purposes of containing any unintended escape of material from that area until

such time as remedial action can be taken. If a large tank has a catastrophic

failure, the liquid alone can cause extensive damage.

The term bunding can also refer to dikes, but it is frequently used to describe liquid

containment facilities that prevent leaks and spillage from tanks and pipes, though

sometimes any barrier is referred to as bunding. Frequently, the liquids in these

tanks and pipes are toxic, and bunding essential for control measures. It is

reasonably easy to construct a "water-tight" bund around the base of a tank or

vessel. A concrete base and a sealed wall of masonry, brickwork, concrete or even

prefabricated steel provides the holding capacity. In the UK commercial

installations exceeding 200 litres and domestic installations exceeding 2500 litres

require a bunded tank to comply with Environment Agency 'control of pollution

regulations as stipulated in “Above-ground proprietary prefabricated oil storage

tank systems” as cited on Scottish Environment Protection Authority.

Properties of a well construct bund wall.

If built properly, bunding is large enough and strong enough to contain the

contents of an entire tank, though regulations may require it to be up to a third

larger. When multiple tanks share a bund, the capacity is based on the largest

tank. In Matsapha Depot I had discovered that the bund holding capacity is

110% of the tanks capacity. One of the most common designs for large tanks is

concrete, brickwork, wall around the tank with a concrete floor. The outside of

the wall may be reinforced with an earth berm.

Concrete works very well for many fuel oil liquids. Smaller tanks often use

containers made of cast steel or plastic. The material used depends on cost, the

chemical properties of the liquid and its density. Plastic tanks cannot hold very

dense liquids at high wall levels. Large, exposed bunding will need a sump

pump or some other system to remove precipitation, though it may also be used

to transfer spilled liquid into another container. Rainwater must be treated if

the liquid being stored is toxic because there may be small amounts of it

surrounding the tank. The bund wall usually has a drainage system linked to

an oil water separator tank; where all contaminated rain water and minor oil

spills are collected.

Some bund wall may have a roof to prevent precipitation from getting in, but

steps must be taken to provide adequate ventilation when storing flammable

liquids. If the wall is over a meter high, it may require a ladder or steps to allow

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people to escape quickly. Another design uses a channel that drains the liquid

to a secondary container.

Bund wall at tank storage facilities should be from 0.5 m to 1.5 m high,

depending on the required containment capacity and the distance to the tank;

the closer the wall to the tank, the higher the wall should be. The distance

between tanks and bund walls should be at least 1 m. If the bund walls are

more than 1 m above the compound floor, consideration of providing steps or

ladders for quick escape should be made. For bund walls close to tanks or

higher than 1.5 m, the rules applicable for confined spaces may apply. A hump

or slope type bunding is helpful when vehicles need access to the area. There is

also a type of bunding that compresses when a vehicle passes over and expands

once it has passed.

To make sure a constructed bund retains its integrity, a reputable company to

repair any defects in the bund wall or lining promptly must be used.

2.1.4 Fuel oil Spills

The most important of all efforts for a fuel oil spill is the preplanning clean-up

activity. Therefore, information, concerning the environment, must be obtained.

This design is meant to be a guide, and should be modified for the location chosen

for the storage facility. Fuel oil spillage losses can be minimised by installing

adequate safety systems, level switch indication, detection and level alarms

working in sequence, not in parallel; meaning they shouldn‟t be dependent on each

other. Also customer site spill response plan is important for the depot staff. In

scenario of fuel oil spills the complaint activates an emergency response plan,

further on the depot manager and staff members also takes preventative measures

against the fuel oil spill.

The area around the tanks where deliveries and loading are made and, if applicable, fuel oil is dispensed should have an impermeable surface and be isolated from surface water drainage systems. This will prevent fuel oil and/or contaminated water getting into the fuel oil and groundwater. If any fuel oil is spilt during a fuel oil delivery, it should be made sure that it does not run into a surface water drainage system. In common basis suitably sized fuel oil separator to direct fuel oily liquid away from surface waters and prevent fuel oil escaping from the site are part of depot design. This reduces the risk of any spilt fuel oil causing pollution if there‟s a spill.

Registered competent technician must be used to check the tanks, bunding and pipework for signs of damage or leaks every year and remove any condensation water that has accumulated within the tanks. During the site inspection and maintenance, written report on the state of the tanks after the inspection is completed are left behind for depot managers. Any repairs or alterations detailed in the report should be done by a registered, competent technician straightaway. Check valves are used to prevent backflow through pumps, branch lines, meters, or other locations where runback or reverse flow are maintained or avoided. Check valves may be of the swing disk, globe, and dual plate hinged disk, spring-loaded poppet, ball valves as reported by Stefan J.R. Simons (2007)

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General Fuel oil Spill Emergency Response Plan

He or she the complaint must raise alarm depending on severity of spill.

Activate the shut-off valve & switch-off the engine.

Hit emergency pump switch to deactivate pumps.

Notify the Site Manager/Shift Supervisor on duty.

Take necessary precautionary measures while awaiting emergency services

response & eliminate any ignition source.

Prevent all potential run-offs to the drains, rivers, streams, etc. by creating

dikes/diverging when possible by using spill kit or natural sand or soil.

Depot Manager/Site Manager

If there is a significant spillage, the depot manger notifies the fire department,

municipality, the local environmental authority Swaziland Environmental

Authority (SEA), emergency services & rapid spill response team and all relevant

bodies.

After all the necessary spill cleaning procedures followed, the Depot Manager

complete event report, determines the volumes of the recovered product against

the volumes of the spilled product & assesses the affected areas.

Staff Members

All staff are expected to evacuate to the emergency assembly point and await

further instructions; that is:

Prevent all potential run-offs to the drains, rivers, streams, etc. by creating

dikes/diverging when possible by using spill kit or natural sand or soil. Dikes

are a form of “secondary” containment in the event of a spill. The diking

arrangement used in the plot plan is a combination of a concrete wall reinforced

with earth on the outside. The dike volume is calculated to hold the contents of

the largest tank within the diked area.

Security

Remove all vehicles from site and security to record their exit.

The security prevents all vehicles except for emergency vehicles from entering

the site.

Telephone Controller

Phone all relevant emergency services & operational staff depending on severity

of spill

Emergency services personnel will resume control over the situation upon their

arrival.

2.2 Swaziland Environmental Authority (SEA) This law enforcement body provide regulations which require people who operate or

intends to operate a fuel oil storage depot to prevent or limit the environmental

damage which they may cause. This regulating body require fuel oil companies to

prevent serious environmental damage from their activities or to take action to

remedy it. Environmental damage includes: serious damage to surface water or

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groundwater; contamination of land where there is a significant risk to human

health; this may include includes:

Private businesses, Farming, Manufacturing businesses, Waste management businesses, Forestry operations and agricultural lands, Public sector – schools, hospitals and government departments or agencies, Charitable and voluntary organisations. 2.3 Training needs at depot.

To ensure safety of the depot storage facility, its workers, a fire prevention system

has to be designed for the storage depot facilities. Specific training programmes are

necessary for all individuals allowed entry to the depot. For each category of

personnel on site, the trainings are repeated periodically. These categories of staff

individual include site personnel, external truck drivers and security.

2.3.1 Site personnel

A personally administered basic introduction must be given to all site personnel.

The basic training should at minimum identify and describe all the hazards present

on the site, explain general safety precautions associated with each site activity,

and provide essential information on how to behave in an emergency. It is expected

that more specific training will be required depending on the specific tasks and

department assigned. A personal file with the individual training records for all

employees is expected.

2.3.2 External truck drivers

Drivers are expected to be not only competent but also to perform safely their

duties at the depot. Whether they stop frequently or infrequently at the depot it is

not relevant. All truck drivers using the site must be trained for the duties they are

expected to perform. Duties like offloading and loading fuel oil within the depot

storage premises.

2.4 Depot Processes

As aforementioned, another way fuel gets into the country is via cargo trucks

through commercial border posts. These fuel oil companies use a logistic company

named Unitrans; for ferrying the fuel oil from different refineries and terminal at

South Africa and Mozambique. When the fuel has arrived in Swaziland local depot;

offloading and loading processes are performed when the fuel reaches the depot

and thereafter being distributed locally. Subsequently all necessary calculations

are made to record the quantity of fuel received into the depot and quantities of

distributed one. For volume monitoring accuracy concerns daily site depot tanks

dipping are performed early in the opening mornings before operations and at

evenings before depot close. These volumes are used in calculating daily volume

stocks at the depot; hence also get monthly and yearly volume trends.

For commercial purposes the depot relies on pump meter readings to get volumes.

This is more reliable form since the meters are mechanical and saves time of

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volumes calculations unlike the dipping system. However due to pumps

mechanical problems encountered over time, the meter reading gets inconsistent.

With the elapse of time pump cavitation and pump lubrication problems.

Cavitation can occur in centrifugal pumps if the flow of liquid to the suction side is

restricted. To curb this problems; making routine checks is a good way to help

avoid costly and unnecessary shutdowns.

2.4.1 Offloading procedure

Upon arrival at the depot, the trucks are allowed to settle for 05-10 minutes

before decantation.

Meanwhile the site operator carries out safety check-ups on the truck driver

and offloading site personnel expected to decant the truck.

In the interim the depot security officer climbs up the truck and per

compartment start seals verification, cuts and later records all the seals. This is

essential to determine if the product has been tempered with along the way.

After the security has finished, the site operator in turn climbs up the truck,

using a special cased mercury glass thermometer takes an average temperature

from the truck fuel tank. The thermometer is tied to a string and immersed into

the tank for some moments before taking the reading in Degrees Celsius. The

thermometer graduation ranges from -10 oC to 100 oC.

The site operator then check for water content in every compartment using

water paste finder. This paste is applied to a coiled aluminium dip stick and

also immersed into the tank. The presence of water in the product will be

determined by if the water finder changes its colour to purplish.

Thereafter the site operator start taking fuel levels in all the compartments

using a regular shaped rod, calibrated dip stick, with the help of the security

personnel and another site personnel records all the compartmental levels.

The site operator also goes to the actual site tanks to be filled up by decantation

and also perform tank dipping in order to get the ullage and inllage of the site

tank.

Once all the dipping is finished decantation follows; connection of pipes is made

available, open all relevant valves and the site offloading pump is start.

2.4.2 Loading procedure

This process is almost the same as offloading process with few an exceptions being

made. Here there is no tanks‟ dipping made prior to the fuel truck loading; however

water checks are also done on the truck before loading takes to action. Worth

mentioning also is that no temperature reading are taken. The site operator

inspects the loading truck perhaps it is not entirely empty before loading and if

found that remainder product is taken into account during loading. The other

differences are that, loading is facilitated by a different loading pump and a change

of flow within the pipeline streams is inhibited by the result of control valves.

2.5 Fuel oil additive dosage

Additives are the essential to the quality for fuel. At the local storage depot some of the fuel oil companies perform additive fuel dosage solely for railway imported fuel, which is 500 ppm Diesel to be specific. The rest of fuel coming through trucks is

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prior dosed from the various fuel oil companies‟ terminals were it is received in South Africa and Mozambique. The railway ferry only 500ppm diesel and the major reason behind for it to be dosed locally it is because the fuel is directly received from the fuel oil refineries. During distribution, additives are injected before pipeline and fuel oil truck transportation from the terminals. This particular terminal dosing is basically important for giving the fuel a distinctive colorant for each of the different fuel oil companies; Total, Engen, Galp and Puma. When the fuel leaves the terminal, its rightful fuel oil companies generally transfers it from the refiner through the terminals to local storage fuel depot, finally to consumers at distinctive filling stations in Swaziland. For this reason, additives added to the fuel after it leaves the terminal are characterised as aftermarket additives. Most of the pipelines and trucks fuel oil carry multiple products, such as diesel 500 ppm, diesel 50 ppm, ULP 95, LRP 95 and illuminating paraffin. 2.5.1 Refinery terminal Additives

There are many additive factors that determine the quality of diesel, petrol and illuminating kerosene fuels. These additives are injected from the refineries as a prerequisite for fuel quality international standards upon refining processes. Some of the oil refinery terminal additives are as follows: Lubricity additive

It is the most widely used additive at the oil refinery. This additive is added at the refinery terminals, it enhances fuel lubricity.

Some refiner‟s inject additives to improve fuel stability, either as a regular practice stability requirements are set in international standards ASTM D4814-14b.

Some refiners use a cetane number improver. Antifoam additives are also commonly used in Africa to ensure that customers

can fill their cars and trucks without spilling fuel on their hands, clothing, and vehicles.

Anti-Knocking Additive Tetraethyllead (TEL) a widely adopted additive for Unleaded Petrol since the 1920s‟ it is a metal base form lead additive.

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3 Equipment Design and Description

There are four correctly active fuel oil companies that import petroleum fuel and

products into the country namely; Puma, Engen, Galp, and Total. I had noted that

oil companies: Chevron and Exel now has merged to form a new oil company

named Puma. These fuel oil companies made up the storage depot of which I was

based at Matsapha and have an approximate maximum capacity of 4‟403,000

Litres. However due to allowance for expansion and contraction the fuel oil storage

depot is seldom operated to maximum bulk, the Depot Manager highlighted that

point to me. The fuel oil companies store fuel such as Unleaded Petrol (ULP 95),

Lead Replacement Petrol (LRP 95), Diesel 500 PPM, Diesel 50 PPM and Illuminating

paraffin.

Storage depot maintenance and services are carried out randomly by a South

African based company. During the service period the overall depot storage, tanks

and piping systems are assessed to comply with the requirements and be in

accordance with standards for an operational depot. Parameters such as depot life

span, equipment strength of construction material are considered.

3.1 Storage Tanks and Ancillaries.

The Depot storage tanks design is such a way that minimum fuel loss due to

vaporisation is kept. Their design facilitate for the dispersion of flammable vapour

accumulated in case of tank expansion during hotter weather conditions. I had

noted that the depot tanks unfortunately do not have vapour recovery systems to

utilise the fuel vapours losses; but instead there is vapour recovery valve mounted

on top of each and every fuel tank, and designed to dispense excess accumulation

of vapour pressure inside the tanks, thus prevent tank explosion during hot

temperatures. This piece of adjustable equipment simply vents off that excess

vapour pressure to the atmosphere during hot conditions. The tanks are painted

silver on the outside to minimise vapour losses due to vaporization of fuel. I had

also noted that petrol has a higher vaporisation rate as compared to diesel and

paraffin. In light of that the silver painting acts as a reflector of heat from within

and without of the tanks. By painting the fuel storage tank with a reflective paint

such as silver, evaporation losses can be reduced over a dark surface.

The depots were approximately constructed way back in the 1960s hence the

storage tanks do not have modern vapour recovery system, however the fuel

transporting trucks make use of such technology to control the fuel whilst on

transit. The fuel trucks tanks are designed in a way that during expansion and

contraction, minimum losses of vapour are controlled.

In other cold countries like in the USA, in some cases heat exchangers are required

in some portions of a petroleum storage depot. The fuel oils, particularly…, will

require heating during the winter when the temperature falls to a point

approaching the solidification condition. Also during higher soaring temperatures,

vapour recovery systems may be required to contain fuel losses.

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Adequate tank maintenance and inspection are performed annually to see to it that

the depots operate at optimum; however at some times maintenance are carried out

if the depot is at fault.

Figure3.1.1 Engen Storage Depot Flow Diagram

3.1.1Types of fuel oil storage tank There are a number of different types of fuel oil storage tanks available. Above ground fuel oil tanks are usually made from cast steel or polyethylene (plastic). They can be single skinned, double skinned or have a built in bund (integrally bunded) as a complete containment system. The commonly used one at the depots is the steel type and single skinned. Single skinned tanks- This are tanks made from one layer of steel or plastic. Single skinned tanks must be put into a secondary containment system, often referred to as a bund. At the depot I had discovered that they use this type skinned tanks and made of cast steel. Double skinned tanks have two layers of steel or plastic with a very small space between them; any ancillary equipment is positioned outside the second skin. Advantages of Cast Steel Cast steel compared to ordinary steel has:

Higher fragility/ lower toughness. Higher damping ability. Higher stability at higher temperatures Lower cost. Higher thermal capacity.

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3.1.2 Types of Pumps used at Depot

Positive displacement pumps In some of the fuel oil companies at the depot I had found out that others uses positive displacement pumps. In common there are two basic types of positive displacement pumps are reciprocating pumps and rotary pumps. Reciprocating pumps use a reciprocating, or back-and-forth; motion to move the petroleum fuel, while rotary pumps use a rotary motion. Liquid is moved through a reciprocating positive displacement by means of a piston or some other device that moves in a back-and-forth motion. The fuel is admitted into the pump when the motion is in one direction and discharge from the pump when the motion is in the other direction, as sourced from Old EHCAY 3C notes and Pumps 1. Rotary Pumps-Gear Pump Rotary positive displacement pumps displace the fuel with a rotary motion, rather than with a reciprocating motion. A typical example includes a gear pump. One kind of gear-type rotary pump consists of a suction port, a discharge port, a casing, and two gears. A motor or other driver moves only one of the gears, called the driving gear. The other gear, called the idler gear, moves because its teeth are meshed with the teeth of the driver gear.

Figure3.1. 2 Positive Displacement Rotary Gear Pump

During operation at the depot, the fuel enters the gear-type pump through the suction port, and is trapped in the spaces between the gear teeth and the casing. As the gears rotate, the liquid is moved along in these spaces. From the discharge side, the liquid is forced into the discharge port. Positive displacement pump applications Positive displacement pumps have many applications in industry. For example,

they are often used in processes that require the injection and metering of specific

amounts of liquids. A positive displacement pump provides an exact amount of

liquid on each stroke / turn. For this advantage they are normally used for truck

loading purposes at the depot. Ideally positive displacement pumps are generally

used to move relatively small volumes of higher viscosity liquids,

Centrifugal pump operations

For delivery/offloading, centrifugal pumps are mostly used. These types of pumps

use centrifugal force to move the fuel at the depot and are the most common type of

pump used in industry today. In industry and especially at Matsapha Depot,

centrifugal pumps are generally used to move large volumes of liquids with low

viscosity. A typical centrifugal pump has a casing, which includes a volute; a

suction eye; a discharge line; and an impeller. The impeller in this case is a

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circular device that has a series of curved vanes extending out from the centre.

The impeller is attached to the pump shaft. When the shaft rotates, the impeller

rotates with it. The volute is a widening chamber that connects the casing to the

discharge line.

During operation, the fuel enters the pump at the centre, and flows outward to the

edge of the impeller, around the inside of the casing, through the volute, and then

out of the pump through the discharge line. The force that moves the fuel along the

flow path is created when the pump is in operation. As the shaft and the impeller

rotate, the vanes of the impeller push the fuel, causing it to move in the same

direction as the impeller vanes. This rapid circular motion creates a centrifugal

force that throws the liquid outward against the casing. The pumps estimated flow

rate I had found to be 750 Litres per Minute.

As the impeller spins, two things happen. First, as the fuel moves outward, it

creates a reduced pressure at the suction eye. The reduced pressure allows more

liquid to enter the impeller, thus providing a constant flow of liquid into the pump.

Second, because the outside edge of the impeller rotates through a greater distance

than the inside edge, the liquid gains speed as it moves outward. When liquid

finally reaches the volute, it is flowing very fast, and it contains a large amount of

energy.

3.1.3 Pipe fitting and Valves Used

There are basically two uses of valves as highlighted by Mr R Singh

To regulate the flow of fluids

To isolate piping or equipment for maintenance without interrupting other

connected units.

A) gate valve

Is a valve that opens by lifting a round or rectangular wedge out of the path of the

fluid. The distinct feature of a gate valve is the sealing surfaces between the gate

and seats are planar, so gate valves are often used when a straight-line flow of fluid

and minimum restriction is desired. The gate faces can form a wedge shape or they

can be parallel. Gate valves are primarily used to permit or prevent the flow of

liquids, but typical gate valves shouldn't be used for regulating flow, unless they

are specifically designed for that purpose. Because of their ability to cut through

liquids, gate valves are often used in the petroleum industry.

Figure 3.1.3 Gate Valve

209135832 Page 14

B) globe valve

This a type of valve used for regulating flow in the depot pipeline, consisting of a

movable disk-type element and a stationary ring seat in a generally spherical body.

Globe valves are named for their spherical body shape with the two halves of

the body being separated by an internal baffle see R Singh. This has an opening

that forms a seat onto which a movable plug can be screwed in to close (or shut)

the valve. The plug is also called a disc or disk. In globe valves, the plug is

connected to a stem which is operated by screw action using a hand wheel in

manual valves. Typically, automated globe valves use smooth stems rather

than threaded and are opened and closed by an actuator assembly. The globe

valves at the depot are normally 3 inch diameter and mostly their casing are made

of cast steel.

Figure 3.1.4 Globe Valve

Although globe valves in the past had the spherical bodies which gave them their

name, many modern globe valves do not have much of a spherical shape. However,

the term globe valve is still often used for valves that have such an internal

mechanism. These types of valves are used for applications requiring throttling and

frequent operation ideally at depot.

C) Approval

All connections and joints are approved and of a type approved for fuel-oil piping

systems. All threaded joints and connections are made tight with suitable lubricant

or pipe component. Protection of pipe, equipment and appliances, all fuel-oil

pipelines, equipment and appliances are checked to be protected from physical

damage.

3.1.4 Fuel oil water separator

The depot layout is such that all drainage is connected to a controlled water fuel

oil separator situated at the bottom of the depot. The oil water separator has an

estimated holding capacity of 20 kilo litres of oil and water contamination. The

depot manager stated to me that the oil water separator is often treated once every

year or when serious emergency arises of excessive spillage; this treatment is done

by quartered South African Companies, issues such safe disposal oil the oil and

water methods are also adhered.

209135832 Page 15

Figure3.1.5 Plant Layout

3.2 Leakages

Daily routine depot check-ups are done to inspect possible fuel leakages; and if

detected preventative measures are adopted to eliminate such leakages.

209135832 Page 16

Process Flow Diagram Technical Key

Table 3.1.1 Process Flow Diagram Technical Key

Symbol Name Function

Tank Truck Fuel Oils Ferrying Trucks

Centrifugal Pump Offloading and loading sometimes.

Positive displacement Pump

Loading

Barrel Lubricating Fuel Oils Container

F

Flow meter Manual Volume Gauge meter

Globe Valve Regulating Flow rate

Gate Valve

On and Off flow and Mostly for Throttling

Ball Valve Control Flow

End Caps Block off Flow at end of a pipe Line

V-118 Swing Check Valve

Ensures that fluid flows in one direction only

Open Vent Allow pressure release from tanks and pumps

Fluid Contacting Vessel Additive dosage mixing drum

Carrying Horizontal Vessel Fuel Oils Storage Tank

209135832 Page 17

4 Results and Finding

4.1 Fuel Quality Monitoring

The local storage depots here in Swaziland rely solely on the main suppliers from

Mozambique and South Africa; for fuel oil quality components parameters. The

main fuel quality components taken into consideration at the local depot are water

content, density and temperature. Upon rail or truck decantation routine tests and

checks are performed independently at the fuel lab department under the

Petroleum Inspection Unit at the Ministry of Natural Resources and Energy. The

Department takes samples for quality measures; if it is discovered that one of the

quality components do not conforms to fuel standards, the Ministry thereon

notifies the oil company to take actions.

Fuel quality monitoring is a key element of consumer protection currently provided in terms of the Regulations and is role of the Ministry Swaziland Standards Authority (SWASA). The Regulations set out the minimum requirements for each specified fuel property as well as the test method that will be used to measure that property. They also set out the procedures to be used for sampling and for interpreting test results. The fuel oil industry tests all batches of petrol and diesel prior to sale to ensure compliance with the specifications. The Ministry‟s Petroleum Inspection Unit jointly with SWASA regulatory authority, is required to sample service/filling stations and report to the registered fuel oil company on a regular basis. The frequency, however, is probably not statistically relevant by virtue of testing and sampling constraints and it is a new project recently fully implemented last year 2015, August. All fuel is required to meet the regulated quality, that is, at the point of sale or supply. Some minor changes occur with regard to fuel properties during storage and distribution and are inevitable. The fuel suppliers have therefore developed exchange specifications for refined product. These are more comprehensive and in some cases more stringent than the regulatory requirements. These exchange specifications reflect more specific fit-for-purpose requirements such as geographical variations and allow some operating margin for quality changes between storage and sale; also accompanying Material Safety Data Sheet (MSDS) for the types of fuel, are shared between the refiners and local storage depot. 4.2 Volume Monitoring

Swaziland consumed approximately 106 million litres of petrol, diesel and paraffin during the last quarter of 2015. The Ministry on monthly basis obtain from Swaziland Revenue Authority (SRA), import volumes generated by a data capturing

programme named ASYCUDA at the commercial borders. This import volumes are then analysed by the Ministry and reports subsequently produced. At the local fuel storage depot, daily volume monitoring is performed. There are three methods for volume monitoring, storage tanks manual dipping, trucks manual dipping and gauge meter readings. 4.2.1 Storage Tanks dipping

At the Depot it is important to able to measure how much fuel is left in the tanks

so that in order to know the right amount the storage tanks needs during

offloading and loading and be able to determine fuel losses due to evaporation on

daily basis. This is necessary to monitor the how fast the fuel depletes with daily

209135832 Page 18

especially on hot weather conditions and be able to quantify fuel inflow into the

depot. As a result daily tanks dipping are carried out to find out opening and

closing stocks for fuel onsite. What happens is; using an aluminium dip stick and a

dipping paste, volume depth levels is measured in millimetres and later on with an

aid of a „dipping levels to volume conversion chart‟, approximate volumes are

obtained and calculated. When doing the volumes calculations, reference to the

standard room temperature 20oc is taken into account at all times. This is

attainable by, whenever the dipping volumes are performed at the depot, tank

temperatures are also recorded. This new volumes are then compensated by using

a volume reduction to 20oc conversion chart.

The most reliable and accurate method for volume measuring was found out to be

the tanks manual dipping system however the depot uses pumps gauge meter

readings for commercial purposes since it is automated and hence convenient to

use. Usually as highlighted before, problems encountered by pump gauged meter

reading are due to

Mechanical pump failure,

Cavitation,

Calibration malfunctioning over time,

Air epode , resulting to higher volume detection,

When such problems are encountered, local artisans or mechanics are called to fix

them.

Depot Tank Dipping Calculations

Tank No. 37.

Ambient temperature = 28oC.

Conversion Factor for reducing volume to 20oC = 0.9935.

Dips Level (B) before decanting a truck = 2964mm.

Dips Level (A) after decantation of a truck = 4337mm.

Corresponding Volume for Dip Level B = 87670 Litres.

Corresponding Volume for Dip Level A = 127725 Litres.

Net Declared Volumes = 39775 Litres.

Level A – Level B = Ullage

(127725-87670) = 40055 Litres.

(40055x0.9935) = 39795 Litres.

(39795-39775) = 20 litres

+20 Litres were gained during offloading

Pump Meter Reading Calculations

Reading before offloading (B) = 9194114 Litres.

Reading after offloading (A) = 9154119 Litres.

A-B = Gauge Meter reading

(9194114-9154119) = 39995 Litres.

39995 – 39775 = 220 Litres.

+220 Litres were gained during the offloading

209135832 Page 19

N: B Assumption is made for the pump meter reading that; the meter is working at

room temperature 20oC.

Truck tank Dipping

A seven compartment truck offloaded 500 ppm diesel into Engen Depot. Using

Trucks‟ Dip chart SP 0009 and referencing from dipping procedures, volumes

conversion I calculated as follows:

DIESEL 500PPM

Compartment

No.

BOL Net

Quant.(L)

Dip

(mm)

Recorded

Temperature

Density Dip

Litres

Litres

Loss/Gain

1. 5123 1210 20oC 5138

2. 5119 1290 5234

3. 5118 1430 5221

4. 6105 1550 6183

5. 6104 1S550 6154

6. 6103 1540 6132

7. 6103 1540 6131

Summation 39775 40195 +420

Table 4.2.1 Compartment Dipping Calculation

IMPORT

VOLUM 2015, Last quarter Import Volumes Trend

Petrol

(kilo litres)

Diesel

(kilo litres)

Paraffin

(kilo

litres) Summation Of Fuel Import Vol. (kilo litres)

SEPT 11793.02 13196.1 0 24989.31

OCT 11502.66 12500.7 79.85 24083.204

NOV 11638.06 15720.6 119.35 27478.013

DEC 13376.37 15693.04 79.33 29148.737

36517.09

43914.33

278.53 105699.264

Table 4.2.2 2015, 4th Quarter 2015, Import Volumes

Figure 4.1.1 4th Quarter 2015 Import Volumes Graph

0

20

40

60

80

100

120

140

02000400060008000

1000012000140001600018000

SEPTEMBER OCTOBER NOVEMBER DECEMBER

Kilo

-Lit

res

Kilo

-Lit

res

Months

4 Months Fuel Import Volumes Trend

PETROL

DIESEL

PARAFFIN

209135832 Page 20

Market Share of Fuel Oil Companies Import Volumes

Figure 4.1.2 4th Quarter 2015 Fuel Import Volumes Company Import Market Share

4th Quarter 2015 Fuel Import Volumes Company Import Market Share

FUEL OIL

COMPANIES

SEPTEMBER TO DECEMBER COMPANIES IMPORT VOLUMES

IN KILO-LITRES

ENGEN 20327.646

PUMA 20779.413

GALP ENERGIA 38626.593

TOTAL 25965.612

SUMATION 105699.264

Table 4.2.3 4th Quarter, 2015, Fuel Import Volumes Company Import Market Shar

19%

20%

36%

25%

SEPTEMBER TO DECEMBER OVERAL PETROL,DIESEL AND PARAFFIN IMPORT VOLUMES

ENGEN

PUMA

GALP

TOTAL

209135832 Page 21

5 Discussion

I have conducted a quarterly report for September to December 2015, to get an

indicative data for the inflow of fuel oil in Swaziland. Looking at the past 5 years

volume data, I have observed that there has been an increase in demand for

petroleum fuel and oil products in the country. This has been partly due to the

increase in cars fleet for the past years and due to other factors mentioned in

Conclusion section of this report. To scale up the fuel supply and thus meet the

demand, a Strategic Fuel Storage Project has been implemented by the Government

through the Ministry of Natural Resources and Energy and other Ministries,

Contractors; which is a storage facility set to increase fuel storage stocks facilities

for the entire country able to hold up to ninety (90) days coverage of fuel supply.

This storage capacity will help the country in predicament cases, which may arise

due to increase on fuel pump prices or limited import supply from international

markets or from any unforeseeable catastrophes. This project will ensure a security

of fuel supply in the country. Such depot will be fed by rail and by road tankers

from the neighbouring countries aforementioned on this report.

The Ministry has a Fuel Pricing System which keeps track of the fuel costs on a

daily basis, and this information varies every time due a number of factors. A Unit

Rate Slate see Appendix A, Table10.1 is used to show the average market cost of

fuel in that month and contrasts it with the pump price of fuel set at that

particular month. This fuel pricing system is monitored by a Fuel Pricing

Committee which meets frequently to control fuel pricing in the Kingdom and thus

give an advice to the Ministry on appropriate price changes to be incurred.

The depot tank dipping and pump meter reading accumulation of volumes gains,

are due to some factors. Depot tank dipping gains are as result of the temperature

variances between the different liquid fuel oils have different expansion and

contraction coefficients and those of liquid fuels and reflect the complex mixtures

that make up the fuels. Apparent losses can therefore arise if the pump meter

overestimates or underestimate the volume. The size of any discrepancies will vary

with calibration accuracy also of the pumps systems, calibration frequency and the

closeness of the graduation flow conditions to the real life conditions during the

depot operations.

Actual losses could have been the result from a number of mechanisms namely:

Incomplete truck emptying during offloading,

Unforeseeable depot spillage,

Vapour loss on transfer of fuel and,

Breathing losses from the depot storage tanks.

During loading at the Terminals in South Africa and Mozambique any fuel free in

the truck compartment or train wagons would result in the trucks/trains

containing excess fuel when refilled and so would appear as a gain when reaching

the local Fuel Storage Depot at Matsapha.

209135832 Page 22

I had worked and found out that between September and October the overall

import volumes decreased by 1.25 percent for petrol. The petrol decrease was on

account of fuel oil companies imported less fuel in October due to less demand as

graphically depicted on Table 4.2.2 and Figure 4.1.1. For diesel, its import

volumes also decreased but by 2.71 percent between the very same months

September-October and I had also noted that there was no illuminating paraffin

fuel imported during the same period. In October to November petrol, diesel and

paraffin import volumes drastically hiked by 0.585, 11.41 and 19.83 percent

respectively. The primary reason for such increase was due to decrease in fuel oil

prices in Swaziland effected on the eve of September 04, 2015 as reflected from the

unit rate slate in Appendix A; the petrol, diesel and paraffin pump prices declined

by 40,75 and 75 cents/Litre respectively. Also worth stating is that towards year

end 2015, national fuel demand increased. Based from my observation and data

analysis I made, amongst the fuel oil companies in Swaziland, Galp Energia has

the biggest market shared in import volumes; it is the largest importer and even by

depot storage capacity the biggest; between September and December it imported

38626.593 Kilo-Litres, which amounts to 36% percent import share. Figure 4.1.2

and Table 4.2.3 sets out the market shares for the fuel oil companies‟ importers

into the country. Total follows being the second highest importer contributed 25

percent, third being Puma with 20 percent and last but not least Engen marginally

close with 19 percent the fourth importer.

209135832 Page 23

6 Conclusion

It is apparent that there is competition in the fuel oil industry in Swaziland as a

result some of the fuel oil companies try means of evading Government fuel taxes.

Some of the trucks illegitimately allegedly get their way into the country through

the various border gates. The depots storage is of old age design and operational

processes, and is lacking most of the new technical construction designs for the

equipment and ancillaries. To address this issue I had gathered from some of the

Depot Managers that a gradual upgrade is being conducted to meet International

Standards for depot processes and equipment designs. A vapour recovering system

and up to standard volume measuring techniques are some of the lacking facilities.

There are contributing factors for the fuel oil import variances and some of them I

had studied are;

International Petroleum Product Prices

These are dependent on the supply and demand balance of fuel in international

markets; over the past few years increasing demand has put intense pressure

on available fuel supplies worldwide and in particular here in Swaziland.

The Currency Ratio of Lilangeni Vs.US Dollar Exchange Rate.

It is a major factor influencing fuel prices and hence import rate, since crude oil

is internationally traded in US dollars, the Lilangeni/Dollar exchange rate affect

how many Emalangeni is needed to buy for a barrel of crude fuel oil. Over the

past months from September 2015, the Lilangeni has depreciated against the

Dollar, which means that, it actually now costs more Emalangeni to buy the

same amount of fuel oil. This has been a barrier in fuel oil companies‟ fuel

importation into the country. This factor also affected fuel prices locally.

Local National Events

Local traditional national events and ceremonies such as: Incwala, Umhlanga

Reed Dance and Buganu also affected fuel importation and fuel pricing; since

the State forks out more transportation fuel budget for the nation to support

such sacred events.

As part of fulfilling the Ministry‟s mandate to inspect and randomly take fuel

samples, I had discovered upon fuel laboratory tests that, some of the fuel does not

meet the standards for fuel products: diesel and petrol. Possible reasons could be

sourced from fuel contamination during distribution, handling and poor tank

maintenance locally at the fuel oil companies‟ storage depot and from various filling

station and distribution sites. However not rule out that it could be also possible

that some of the fuel comes already contaminated from the fuel oil refineries and

terminals in South Africa and Mozambique.

209135832 Page 24

7 Recommendations

The depot storage there is a need arises to improve measuring methods for fuel.

New technologies need to be adopted including electronic, float and hydrostatic

gauges, sight or visual gauges and dip sticks.

High level indicator on the tank gauging system must be installed.

Regime Inspection must be designed and implemented for testing and

maintenance to ensure that the new volume measuring system are operated as

designed when required for leak, overfilling and spill prevention and monitoring

systems should be built in new tanks.

The depot for strict security measures in place, including: a security fences and

security entrance control; a high voltage electric fence, where it is deemed

necessary; manned security and CCTV; and anti-theft systems built into the

leak detection system.

In addition to the dipping volume measuring methods, use of overfill prevention

also has to be implemented, devices to safeguard against spills. These can be

electronic and mechanical which sound an alarm and/or give a visual warning

or automatically stop the fuel oil delivery into the tank.

The Ministry in liaison with local environmental authority and relevant

regulation entities must scrutinise and enforce legal requirements with regards

to the aforementioned recommendations and on tanks construction, and

designs.

For fuel quality purposes the fuel storage depot must have fuel testing

laboratories, fit for the use towards adherence and conformance to the quality

standards of fuel importation into the country.

Through the on-going the Ministry and Swaziland Standards Authority (SWSA)

implementation of ISO 17020 (Inspection Standard), it is recommended to

conduct a gap analysis to remedy the illegal importation of fuel into the country

by some of the fuel oil companies.

209135832 Page 25

8 References

8.1.1 Mr Gama Mtaliyane- Depot operator.

8.1.2 Mr Mkhonta Mfanbela- Puma Depot Manager.

8.1.3 Bunding, South Australian Environment Protection Authority (2012).

Available from: https://en.wikipedia.org/wiki/Bunding Accessed on: 29

February 2016.

8.1.4 Scottish Environment Protection Authority (2011) Available from:

https://www.gov.uk/government/uploads/system/uploads/attachment_dat

a/file/485213/pmho0811bucr-e-e.pdf Viewed on: 24 February 2016.

8.1.5 Stefan J.R. Simons (2007). Concepts of Chemical Engineering 4 Chemists, p.

342, RSC Publishing, ISBN-13:978-0-85404-951-6

8.1.6 Notes set from R Singh from Valves, OPERATIONS TRAINING

PROGRAM, EQUIPMENT OPERATIONS, NUS p.1-9, Training

Corporation, 1989. Revised: January 2007 Mgrs. C Brink

8.1.7 Notes set from Old EHCAY 3C notes and Pumps 1, P 8-11,

OPERATIONS TRAINING PROGRAM, EQUIPMENT OPERATIONS,

NUS Training Corporation, (1987). Revised: August 2005 Mgrs. C

Brink

8.1.8 Engen, Dipping, Loading and Offloading Procedures (2016)

8.1.9 Engen Spill Procedures (2016)

8.1.10 Tests Procedures. (2016)

209135832 Page 26

9 GLOSSARRY

Vent pipe - This allows fuel oil vapour and air to escape from the tank when it is being filled and allows air in when fuel is being drawn off. Ancillary equipment - These are the fittings and pipework that all tanks will have, e.g. a vent pipe, but others may be needed according to the tank type, location or use. Additive- Means a substance intentionally added to a petroleum product in trace or small quantities in order to improve one or more of the petroleum product‟s performance or storage stability, its performance in an engine, or a reduction of the emissions from an engine powered by that petroleum product.

Blend- Means a mixture of two or more compatible petroleum products having different properties in order to produce an intermediate or final petroleum product with desired attributes. End-consumer- Means a person acquiring a petroleum product for own consumption. LRP 95 - Means lead replacement petrol, which is metal-containing unleaded

petrol sold as a replacement for leaded petrol.

ULP 95- Unleaded petrol: means petrol containing metal-based additives, other than lead, but including phosphorus with a RON of 95. Oil Refinery - Is an industrial process plant where crude oil is processed and refined into more useful products such as petroleum naphtha, gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas. Depot – Is an industrial facility for the storage of oil and/or petroleum products and from which these products are usually transported to end users or further storage facilities. Terminal – Is an industrial facility sometimes called a depot, used for the storage of oil and/or petroleum products and from which these products are usually transported to end users or further storage facilities. Cavitation- It is the formation of bubbles in a liquid, typically by the movement of a propeller through it.

Bund wall- It is wall surrounding an industrial fuel tank, for spill containment purposes. Pump Price - It is a price paid by car users for fuel at the local fuel filling stations. Unit Rate Slate - Shows the average market cost of fuel in that month and contrasts it with the pump price of fuel set at that month

209135832 Page 27

10 Appendix A (Extras) September 2015, Unit Rate Slate

Table 10.1 September, 2015 Unit Rate Slate

Mogas Mogas Gasoil Gasoil Illum

Items to INPUT 95 LRP 95 ULP 0.05% S 0.005% S Para.

Exchange Rate (Average month $/R) 13.6156

Std Bank Prime Average for month 9.500

Avg. Worldscale Freight - USc/mt. 2432.000 2432.000 2346.000 2346.000 2346.000

Demurrage $ per ton per day 0.217

AFRA - MR vessel rate +15% 180.435

Avg. FOB $Bbl 62.751 62.751 59.902 60.622 58.884

Cargo Dues: @ NPA Tariff 2.904 c/l 2.904

Coastal Storage 4.562

Insurance % 0.1500 0.1500 0.1500 0.1500 0.1500 0.1500

0

2nd Period from

04-September-2015

to Mogas Mogas Gasoil Gasoil Illum

End of Accounting Month 95 LRP 95 ULP 0.05% S 0.005% S Para.

INPUT

Standard Densities 0.750 0.750 0.840 0.840 0.795

Conversion Factors 3.8038 3.8038 3.7991 3.7991 3.8011

Exchange rate (Avg mth $/R) 13.6156 13.6156 13.6156 13.6156 13.6156

Std Bank Prime Average for month 9.500 9.500 9.500 9.500 9.500

Avg. Worldscale Freight USc/mt. 2432.000 2432.000 2346.000 2346.000 2346.000

Demurrage @ $0.217 /ton/day for 3 day period - USc/mt 65.100 65.100 65.100 65.100 65.100

Worldscale plus demurrage 2497.100 2497.100 2411.100 2411.100 2411.100

AFRA - MR vessel rate + 15% 180.435 180.435 180.435 180.435 180.435

Avg. FOB - USc/USg ($Bbl /42=USc/US gal.) 149.407 149.407 142.624 144.338 140.200

Avg. FOB $Bbl 62.751 62.751 59.902 60.622 58.884

Basic Fuel Price Calculation

F.O.B.-Swaziland cents/litre 534.799 534.799 511.150 517.294 502.199

Freight plus demurrage 46.010 46.010 49.757 49.757 47.091

Insurance: 0.15% of FOB + Freight 0.871 0.871 0.841 0.851 0.824

C.I.F. 581.680 581.680 561.748 567.902 550.114

Ocean Leakage: 0.3% of CIF 1.745 1.745 1.685 1.704 1.650

Cargo Dues: @ NPA Tariff 2.904 c/l 2.904 2.904 2.904 2.904 2.904

Landed Cost at Durban 586.329 586.329 566.337 572.510 554.668

Coastal Storage 4.562 4.562 4.562 4.562 4.562

Coastal Stock Financing Cost 3.012 3.012 2.909 2.941 2.849

Basic Fuels Price at Durban 593.903 593.903 573.808 580.013 562.079

Railage Durban/Matsapa c/litre 38.510 38.510 38.510 38.510 38.510

IMPORT PARITY MATSAPA 632.413 632.413 612.318 618.523 600.589

Slate Calculation

Pump Prices 1135.000 1130.000 1120.000 1125.000 745.000

Less: Dealers Margin 83.000 83.000 83.000 83.000 83.000

Wholesale selling price 1052.000 1047.000 1037.000 1042.000 662.000

Customs Duty (a) 0.091 0.091 0.183 0.183

Excise Duty (b) 3.909 3.909 3.817 3.817

Less: - Total Customs & Excise Duty (a+b) 4.000 4.000 4.000 4.000 0.000

- Fuel Tax (Impost) 220.000 220.000 220.000 220.000

- Fuel Oil Levy (Impost) 70.000 70.000 70.000 70.000

- Depot Storage & Handling 6.600 6.600 6.600 6.600 6.600

- Road Delivery 12.030 12.030 12.030 12.030 12.030

- Import Parity Matsapa ( as above) 632.413 632.413 612.318 618.523 600.589

- Industry Margins 64.000 64.000 64.000 66.000 64.000

- MVA 35.000 35.000 35.000 35.000 0.000

Unit Over/(Under) Recovery c/litre (BFP Basis) 7.957 2.957 13.052 9.847 (21.219)

Mogas Mogas Gasoil Gasoil Illum

95 LRP 95 ULP 0.05% S 0.005% S Para.

Industry BFP Unit Rate Slate - SWAZILAND

September-2015