1. Introduction and Context Oil as a source of energy is an undisputed reality of the age in which we live. The oil and petroleum industry is an essential and valuable part of the South African economy. It follows then that transportation in this industry is of crucial importance. Simply put, without the efficient transportation of the various crude and petroleum products, the energy requirements of the country could not be met. While there are various modes of transportation within South Africa servicing this industry, this study will concentrate on the carriage of crude oil and petroleum products by sea, and its handiing in the associated ports. The main objective will be to examine the pricing structure raised by the ports of South Africa against the oil industry for th'a transportation of the crude and petroleum products moving through the various ports. 1.1 Background During this researcher's tenure as a shipping agent on behalf of the oil majors in the ports of South Africa, the pori authorities' charges were dealt with on a regular basis. The inherent problems with the charges and the resulting conflicts created between the port authorities and the oil majors became quite familiar to the researcher during her years of working with the two parties. 1.2 Objectives of the Study This study will start by looking at the economic theory and principles of port pricing structures. Chapter Two will work toward outlining the optimal port pricing structure a port authority should adopt, in order to ensure it is working according to sound economic principles as well as meeting the various objectives of the stakeholders utilising the port's infrastructure, superstructure and services. Chapter will focus on the South African oil industry and the importance of crude oil and its petroleum derivates as an energy source. The industry will placed in larger context of SADC, the various role players will be identified and the modes of transport used for the carriage of crude and petroleum products will outlined. The chapter will close with a presentation of the product costing for the petrol price South African consumers' pay at the petrol pumps. Chapter Four presents an overview of the ports South Africa, their facilities, their management arrangements and their pricing structures. A brief. history of the ports will be followed by a discussion of the need a restructuring process and an outline the proposed privatisation process will be Following this, the current management structure related pricing tariffs will be detailed. Chapter Africa and will explore the relationship ben.veen of the ports of South oil industry. history of this relationship will be set out, followed by the current dynamics affecting it. The study will then move on to examine the oil industry infrastructure found in these ports in terms of ownership management of Port tariffs and the question of who actually pays what will be addressed. The that created and continue to create tensions between oil majors and the ports of South Africa will highlighted. The chapter will conclude by presenting an ideal pricing structure, which could work towards resolving some of these issues. Chapter Six will discuss two different international models based on energy demand and supply similar to South African situation. The port pricing structure of these models will then be compared to that of South African ports in order to present a best-working practice. The purpose of this is to bring in an international perspective for the ideal pricing structure presented with the conclusion in Chapter Seven. 1 Methodology of the study The researcher initially used interviews with the various bodies as a means of gathering information. These data were then verified against textual information sources. Statistical figures were gathered and correlated into formats, which could then verify -, or disprove -- different hypotheses put forward in the study. / Thesis (MBA)-University of Natal, 2003.