Sasol Responds to Statements in South Africa's 2006 Budget Speech
February 15 2006 - 12:34PM
PR Newswire (US)
JOHANNESBURG, South Africa, Feb. 15 /PRNewswire-FirstCall/ -- In
response to the 2006 Budget released in Parliament today, Sasol
pointed out that it did not have sight of the proposals relating to
the appointment of a task force to investigate the possibility of
windfall gains being shared with the public. It was therefore still
studying the proposals and would be engaging with Government to
obtain further information on the proposed investigation. Sasol
will cooperate with the proposed task force, and is confident that
once all of the pertinent facts have been scrutinised, an outcome
will result in which the interests of all stakeholders would be
addressed. Referring to the global commodity price boom that has
resulted in significantly higher oil, gold and platinum prices,
Sasol acknowledges that local motorists, like their international
counterparts, unfortunately are incurring additional expense for
fuel. However, as the Minister of Finance pointed out in his
speech, the price of petrol is determined by the Department of
Minerals and Energy through a regulated mechanism. The Minister's
statement furthermore unfortunately focuses on the domestic
synthetic fuels industry only. Sasol is the major contributor to
this industry and the single biggest industrial investor in South
Africa. The company is concerned that its ability to reinvest
profits into its operations will be compromised if windfall taxes
are imposed. Selecting local companies for possible legislative
intervention will be severely detrimental to the ability of South
African companies to compete with the much larger oil supermajors.
While Sasol acknowledges that high oil prices resulted in higher
profits in 2005 than in its 2004 financial year, the significant
strengthening of the rand offset the benefit of higher oil prices
and resulted in Sasol's profit for 2005 being more or less the same
as achieved as far back as 2002. The notion of "windfall gains"
does not take account of this phenomenon. Regarding the Minister's
reference to tariff protection, Sasol responded that it had, in
common with other industries such as the motor industry, received
tariff protection. In terms of the then prevailing agreements,
Sasol had repaid all of its obligations to Government, and was
confident that it had fully complied with all of the conditions of
the tariff protection dispensation. Similarly, in line with other
industries such as steel and telecommunications, Sasol was indeed
established by Government. Upon privatisation, Government was
handsomely rewarded for its investment, and is still a major
shareholder (and recipient of dividends) through the IDC and the
PIC. Sasol Investor Relations Team Cavan Hill, Brian MacKinnon,
Hubert Naude and Nadia Rencken Tel.: +27 11 441 3113/3563/3321
Sasol is an integrated oil and gas company with substantial
chemical interests. Based in South Africa and operating worldwide,
Sasol is listed on the NYSE and JSE stock exchanges. We are the
leading provider of liquid fuels in South Africa and a major
international producer of chemicals. Sasol uses proprietary
Fischer-Tropsch technologies for the commercial production of
synthetic fuels and chemicals from low-grade coal and natural gas.
We manufacture more than 200 fuel and chemical products that are
sold worldwide. In South Africa we also operate coal mines to
provide feedstock for our synthetic fuels plants. Sasol operates
the only inland crude oil refinery in South Africa. The group
produces crude oil in offshore Gabon, supplies Mozambican natural
gas to end-user customers and petrochemical plants in South Africa,
and with partners is developing gas-to-liquids fuel joint ventures
in Qatar and Nigeria. Internet address: http://www.sasol.com/ JSE:
SOL; NYSE: SSL First Call Analyst: FCMN Contact: DATASOURCE: Sasol
CONTACT: Sasol Investor Relations Team - Cavan Hill, Brian
MacKinnon, Hubert Naude and Nadia Rencken, +27-11-441-3113,
+27-11-441-3563, +27-11-441- 3321, Web site: http://www.sasol.com/
Copyright