Sasol Supports New Fuel Pricing Mechanism.Energy Editors/Business Editors JOHANNESBURG, South Africa--(BUSINESS WIRE)--Feb. 14, 2003 The Minister of Minerals and Energy, Ms Phumzile Mlambo-Ngcuka, announced that a new fuel pricing mechanism is to replace the In-Bond Land Cost (IBLC IBLC International Business Law Consortium IBLC In-Bond-Landed-Cost IBLC International Booksellers'and Librarians' Centre IBLC Indiana Black Legislative Caucus IBLC International Bible Learning Center IBLC Independent Broadcast Locals Council ) with effect from 2 April 2003. While the IBLC served as a reasonable proxy for international fuel prices for some decades, Sasol recognizes that it lost credibility in recent years and has been supportive of the South African government's need to replace it with a new formula which more accurately represents international product prices. The new formula will be known as the Basic Fuel Price (BFP BFP n. slang for bona fide purchaser, which means someone who purchased something (e.g. a bond, a promissory note, or jewelry) with no reason to be suspicious that it was stolen, belonged to someone else, or was subject to another party's claim. ). It will represent the true cost of alternative fuel imports into South Africa and includes allowances for, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , freight costs from refining centres to South African ports, demurrage A separate freight charge, in addition to ordinary shipping costs, which is imposed according to the terms of a carriage contract upon the person responsible for unreasonable delays in loading or unloading cargo. , wharfage WHARFAGE. The money paid for landing goods upon, or loading them from a wharf. Dane's Ab. Index, h.t. , storage, financing and insurance costs. Over the five-year period from 1997 to 2002, the new formula would have resulted in fuel prices being about 4-5 cents per litre lower than those derived from the IBLC formula. It is expected that in future years prices derived from the new formula could also be up to 4-5 cents per litre lower. As the IBLC and BFP formulas use different bases for arriving at South African refinery gate prices, however, the new formula may at any given point in time be lower or higher than the IBLC would have been, depending on the timing of adjustments to the various formula components. A narrowing of the difference between the two formulas is forecast as the surplus in international refining capacity is reduced. Sasol believes that this change introduces a more business-like and market-related price. It will relate South African fuel prices to some of the most efficient refineries in the world (ie in Singapore and the Mediterranean), thereby ensuring that the local industry maintains its international competitiveness. The impact of this change on Sasol's earnings in the current financial year ending 30 June 2003, is expected to be minimal. In the next financial year, this change could impact earnings by between 2 and 3%, which is significantly less than some industry analysts and other pundits have anticipated. Sasol cautions that rising oil prices as a result of possible conflict in the Middle-East could overshadow o·ver·shad·ow tr.v. o·ver·shad·owed, o·ver·shad·ow·ing, o·ver·shad·ows 1. To cast a shadow over; darken or obscure. 2. To make insignificant by comparison; dominate. any short-term reduction in fuel prices resulting from the change to be implemented. Sasol, established in 1950, is a world-leader in the commercial production of liquid fuels and chemicals from coal and crude oil. The company has sales of more than US $6-billion per year and is listed on the JSE JSE See: Johannesburg Stock Exchange Securities Exchange (SOL) with a market capitalisation of more than US$7-billion and on NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on (SASOY) in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Sasol manufactures more than 200 fuel and chemical products at its plants in Sasolburg and Secunda in South Africa as well as at several plants abroad. Its products are exported to more than 90 countries around the world. The company has developed world-leading technology for the commercial production of synthetic fuels and chemicals from low-grade coal as well as the conversion of natural gas to environment-friendly diesel and chemicals. Internet address: www.sasol.com |
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