Prepared for a fuel shortage? Make sure you're prepared for the risks too

By Ryno de Kock, Head of Distribution at PSG Insure

Recent geopolitical tensions and volatility in global oil markets have prompted many South Africans and businesses to increase their fuel reserves as a precaution against potential supply disruptions or price increases. While this may seem like a practical response, storing petrol, diesel and other flammable liquids incorrectly creates significant risks that are often underestimated.

Fuel is inherently hazardous and, when stored poorly, in excessive quantities or in unsuitable containers, can significantly increase the likelihood of fires, explosions, spillages and environmental damage. In addition to the safety implications, non-compliance with applicable regulations and insurer requirements could affect insurance cover and the assessment of a claim.

Residential fuel storage requires careful consideration
Many homeowners may not realise that fuel storage at residential properties is subject to specific guidelines. These requirements are designed to reduce the risk of accidental fires, spills and other incidents that could endanger people and property.

According to the South African Insurance Association (SAIA), residential properties should store no more than 25 litres of fuel or other flammable liquids. Fuel should be kept in secure, well-ventilated containers and stored in a manner that minimises the risk of ignition, leakage and contamination.

Property owners should also ensure compliance with municipal by-laws, occupational health and safety requirements, and relevant building regulations. While these measures may seem straightforward, overlooking even a small detail can substantially increase both safety and insurance-related risks.

Commercial businesses face different obligations
For businesses, fuel storage requirements are generally determined by an insurer's underwriting criteria, the nature of the operations and applicable regulatory requirements. Unlike residential properties, there are usually no fixed limits on the quantity of fuel that may be stored, provided the necessary safeguards and compliance measures are in place.

Businesses storing fuel or other flammable liquids should ensure that storage facilities are appropriately designed, maintained and operated, and that fuel is stored in secure operational tanks or containers. This includes implementing measures to prevent fires and spills, separating fuel storage from other equipment where necessary, and adhering to all relevant health, safety and building standards.

Importantly, fuel storage requirements can vary depending on location, as municipal by-laws differ across jurisdictions. Businesses should therefore confirm the specific requirements that apply to their operations and premises.

Speak to your adviser before increasing fuel storage
In times of uncertainty, it is understandable that individuals and businesses may wish to keep larger fuel reserves on hand. However, risk mitigation should form part of that decision-making process.

Before increasing fuel storage volumes, it is best to speak to your insurance adviser to confirm the requirements applicable to your policy and insurer. This can help ensure that appropriate safety measures are in place and that you remain compliant with policy conditions.

A proactive conversation today could help prevent significant financial losses tomorrow while providing that, should an incident occur, you have the protection and support you expect from your insurance cover.