Government is considering refurbishing oil refineries in South Africa with an aim to supply oil products across the Southern African region and the rest of the continent.
This comes amid the Middle East war, which has directly impacted oil prices and transportation after the abrupt closure of the Strait of Hormuz, leading to inflated crude oil prices.
The surge in oil prices has been recently felt across the country as fuel prices jumped up, reaching an all-time high since the Russian invasion of Ukraine in 2022.
This resulted in the National Treasury and the petroleum department intervening by offering R3 per litre relief to motorists for the month of April after the petrol was initially expected to increase by over R6 and diesel by over R10.
The minister in the Presidency, Khumbudzo Ntshavheni, said South Africa does not rely on the Middle East for crude oil but refined products, emphasising that crude is imported from Nigeria and Angola.
She said South Africa has its own refining capacity but was not quick enough to restore it when the refineries shut down.
Only two crude oil refineries, including the National Petroleum Refiners (Natref) and Astron Energy, are still running, this is alongside Sasol’s coal-to-liquids plant in Secunda, Mpumalanga.
South African Petroleum Refineries (SAPREF) shut down in 2022 following flood damage in KwaZulu-Natal. The country now depends on oil imports to match the demand.
She said the long-term plan is to rebuild South Africa’s refining capacity. At present, she explained, the limited refining capability in countries such as South Africa and Nigeria leaves the continent too dependent on other regions.
She said that reliance is risky, and as Africa’s leading economy, South Africa has a responsibility to develop strong and reliable refining facilities. These would not only serve the country’s own needs but could also supply neighbouring states and the wider continent.
Ntshavheni also emphasised that there is enough fuel supply, but this may be threatened by the recent trend of panic buying.
“Depending on how South Africans behave, that will determine the extent to which we have got supply,” said Ntshavheni.
- South Africa plans to refurbish its oil refineries to supply oil products locally and across the Southern African region and continent.
- The move follows rising oil prices and transport issues caused by the Middle East war and the closure of the Strait of Hormuz, leading to record-high fuel costs.
- The government intervened by providing a R3 per litre fuel relief in April to mitigate sharp increases that were initially projected at over R6 for petrol and R10 for diesel.
- South Africa currently relies on crude oil imports from Nigeria and Angola but imports refined products from the Middle East; domestic refining capacity has decreased due to refinery shutdowns and damages.
- The long-term goal is to rebuild and expand refining capacity to reduce Africa's dependence on external refined oil sources and ensure supply stability amidst rising demand and regional responsibilities.
