Chairperson, Deputy Minister of Energy, Comrade Barbara Thompson, Chairperson and members of the Portfolio Committee on Energy, led by Comrade Siza Njikelana, members of Cabinet present here today, Members of Parliament, officials of the Department of Energy led by the director-general, invited guests and stakeholders, ladies and gentlemen, once again the people of South Africa have spoken, and have boldly made known their support for the path of development, redress and genuine empowerment. The people of South Africa have reaffirmed the correctness of the policies of the ANC.
As leaders in and outside of government, we have once again heard millions of our countrymen and -women, young and old, assert that much has been achieved since the dawn of democracy, but most importantly, also saying that they expect much better quality and more services.
This budget will, therefore, focus on those key deliverables and outputs that are aligned to the broader policy objectives of government as a whole, and are also responsive to key instruments such as the New Growth Path and the Industrial Policy Action Plan.
Hon members, before I elaborate on our plans for the next financial year, allow me to reflect on some of the key commitments made in the 2010 Budget Vote speech. The following are key amongst these.
The success of our efforts to ensure energy adequacy, and our working together with the liquid fuels industry and municipalities during the 2010 Fifa Soccer World Cup, laid a firm foundation for future co-ordinated planning.
We have managed to eradicate the backlog on petroleum licensing and can indicate that all completed licence applications are now processed within the prescribed 90 days. We initiated and have now completed the compliance audit with regard to the Liquid Fuels Charter; we published the roadmap to clean fuels or CF2 and have received comments from all stakeholders; and the 20-year Integrated Resource Plan, which is the product of an extensive public consultation process, has been gazetted.
We managed to institutionalise the SA National Energy Development Institute, setting the stage for co-ordinated research as well as energy efficiency and demand-side management interventions.
Through the price regulation of liquefied petroleum gas, LPG, we managed to save consumers R200 million in the previous year. Through this we are setting the pace for the development of the necessary infrastructure for further savings; work on the Integrated Energy Planning Strategy is progressing well, and is currently subject to further engagement with, amongst other bodies, the National Planning Commission.
In response to the injunction of the President in the state of the nation address, the Independent Systems and Market Operator Bill was presented to and approved by Cabinet.
Chairperson, the department has been allocated a total of R15,9 billion over the Medium-Term Expenditure Framework, MTEF, period with an allocation of R6,09 billion for 2011-2012.
This House should note that 95% of the 2011-2012 budget, or an amount of R5,78 billion, will be transferred to the following. The Integrated National Electrification Programme will receive R3,2 billion for transfers to municipalities and Eskom to continue with the very important task of electrification and the nongrid programme.
The SA Nuclear Energy Corporation, Necsa, has been allocated R586 million to continue with its central role as the anchor for nuclear energy research, development and innovation.
Energy Efficiency and Demand-side Management will receive about R398 million for demand-side management interventions in 21 municipalities and Eskom; and lastly, Transnet, to which we transferred R1,5 billion during the previous financial year, as a contribution to the security of the supply portion of the pipeline.
This year again, an amount of R375 million will be transferred quarterly to Transnet, flowing from the levy that was announced last year by the Minister of Finance. Thus this leaves the department with 5% or R305 million for its operations.
Furthermore, over the medium term, expenditure is expected to decrease from R5,6 billion in 2010-2011 to R4,3 billion in 2013-2014, in the main due to the termination of transfer payments to Electricity Distribution Industry Holdings and the reduction of allocations in the demand-side management programme.
In relation to matters of hydrocarbons, ladies and gentlemen, we present this budget at a time when political events in the Middle East and North Africa have had and are continuing to have a direct impact on the pockets of ordinary South Africans. This is in the main due to the fluctuations in the oil price, which has over a period of 24 months seen a fourfold increase from US$30 per barrel to a high of US$130.
There are also indications that speculators in the market take advantage of the prevailing challenges and add a premium of their own. It is therefore important for South Africans to use fuel efficiently in order to contribute to a secure and affordable fuel future. To this end, I will be launching a fuel-efficiency campaign during the month of June.
We will finalise the framework for Clean Fuels during the course of this year, focusing in particular on the cost for infrastructure upgrades. The impact of this modernisation process is that refineries will have to be upgraded and in so doing, we will create more than 1 000 jobs that can be sustained throughout the duration of the programme.
In a further response to the President's call for accelerated job creation, we will also reduce the time it takes to process a licence for new service stations to 60 days in order to accelerate the construction of new service stations. During construction each new station is estimated to sustain 120 direct jobs, and plans submitted to the department by industry indicate that an additional 1 500 jobs can be created by this activity alone.
We undertook to deal with regulatory uncertainty in the liquid fuels sector and have initiated a programme to develop regulatory accounts which will be used to reward investment in the value chain. We have completed the preparatory work and will now move towards early implementation of some of the aspects where decisions have been taken.
Hon members, as a nation, we must make investments today to secure our future. Our investment in infrastructure initiatives such as the New Multiproducts Pipeline, NMPP, may appear to be a burden today, but for the next 50 years this economy will reap the benefits that will sustain its competitiveness.
In May 2010, I indicated that we would conduct an audit into the compliance of the oil industry with the provisions of the Liquid Fuels Charter and I duly launched the audit process shortly before the 10th anniversary of the signing of the first-ever empowerment charter, the Liquid Fuels Charter,