Where South Africa’s petrol comes from?

South Africa buys the majority of its fuels from Oman, the country accounting for 20.1% of refined petroleum imports.

In 2021, South Africa spent $1.58 billion on purchasing petrol and diesel from the Middle-Eastern nation, which translates to R29.2 billion in today’s money.

Just behind Oman, the United Arab Emirates is responsible for 15.9% of all propellant imports, followed by India at 15.7%, Saudi Arabia at 15.5%, and Italy at 5.53%.

By buying over R145 billion of fossil fuels throughout 2021 from other countries, South Africa was the 26th-largest importer of refined petroleum products in the world, according to data from the Observatory of Economic Complexity (OEC).

Why local refineries are vanishing

In recent years, South Africa has become much more dependent on imported fuels to meet up to 60% of demand, following a wake of local refineries shutting down in short succession.

Of the six refineries that operated in the country in 2019, only two were still producing petroleum at the end of 2022 reflecting an 80% output drop due to unplanned shutdowns.

These closures are a result of a long-running contestation between oil refiners and the national government, the latter of which has been trying to introduce cleaner fuels to the country since 2006, in addition to policies requiring oil companies to keep more stock as a buffer against supply interruptions, wrote The Conversation.

The move is in line with international standards and aimed at assisting the domestic car manufacturing industry which produces models mainly for European markets where engines must be able to run on cleaner combustibles.

Initially, the industry protested the government’s decision by threatening closures unless they were given financial incentives to upgrade their refineries; in response, the government relaxed its deadlines but it did not provide monetary support.

In short order, plants started closing with state-owned PetroSA “temporarily” suspending operations towards late 2020 due to offshore gas and condensate feedstocks running dry, as per News24.

Currently, the organisation is seeking partners to assist in the refurbishment of the gas-to-liquids refinery in Mossel Bay in order to restart production as soon as possible, but the location isn’t active.

Not long after the PetroSA plant’s demise, in December 2020, Engen’s factory suffered a fire and explosion and after assessing the damages, the fuel maker stated that it will convert its domestic refinery into a new storage facility as it was “no longer sustainable in the long term,” Reuters reported.

The Sapref refinery, owned by BP and Shell, was next in line and it announced that it will temporarily close its doors during the July 2021 riots that ravaged the Kwa-Zulu Natal province.

Fast forward to February 2022, the company made public that it will freeze spending and operations on an indefinite basis but that a restart in the future isn’t completely out of the question.

“The decision has been taken to allow an informed finalisation on the various options available to the shareholders, a sale option being the most preferred,” said a company statement.

Therefore, the only remaining refineries still in operation in South Africa today are Sasol’s Natref and Glencore’s Astron Energy.

Astron was offline in 2020 for refurbishment after it, too, sustained damage from an explosion, and just last year, Natref declared force majeure due to a delayed shipment of goods and also put production on hold for around one month.

Together, these plants produce about 208,000 barrels per annum, significantly less than the 703,000 barrels all six refineries made when they were functioning at full bore.

Subsequently, the remaining facilities are unable to meet motorists and the commercial industry’s demand for fuel, which has skyrocketed in the presence of record levels of load-shedding.

The silver lining is that the closure of the local factories doesn’t impact fuel security in South Africa too much, because instead of now relying on crude oil imports, the country is relying on refined petroleum imports.