Corruption scandal putting South Africa at risk of petrol shortages

South Africa’s ongoing concerns about fuel shortages may come to pass because of a scandal that rocked the nation a decade ago.

Back in 2016, the “SFF Oilgate” scandal dealt a severe blow to South Africa’s strategic petroleum reserves, which the country has still not recovered from.

This, combined with South Africa’s diminishing local capacity to refine fuel, means the nation is highly susceptible to fuel shortages caused by global market disruptions.

For weeks now, headlines have been dominated by updates on the conflict between Iran, Israel, and the United States in the Middle East, which have caused oil prices to skyrocket.

This past weekend, Brent crude oil surged to over $110 per barrel, which is likely to result in massive petrol and diesel price hikes once the official fuel price adjustments take effect in early April.

Ashburton Investments’ head of fixed income, Albert Botha, warned that high prices are not the only concern, as there is a real possibility that domestic fuel availability will become a problem.

The Department of Mineral and Petroleum Resources (DMPR) stated on 10 March 2026 that South Africa’s fuel stocks are secure for the time being and that there is no risk of a shortage.

“The department wishes to assure the public that there is currently no immediate risk of fuel shortages in South Africa.”

“Oil companies that currently import refined petroleum products from countries affected by the conflict are actively exploring alternative supply sources to ensure uninterrupted fuel availability in the domestic market,” it said.

However, motorists are already starting to report shortages at forecourts around the country, particularly for diesel, since large quantities are needed for commercial trucks and agricultural vehicles.

Botha stated that availability will remain a concern as long as the conflict continues, as South Africa is in a vulnerable position that dates back decades.

The corruption scandal that cost South Africans dearly

Botha highlighted that South Africa’s strategic petroleum reserves currently stand at roughly 7.7 to 8 million barrels – far below its capacity of 45 million barrels.

He claimed that this is because the country never recovered from the 2016 reserve sale that the High Court later ruled to be corruption.

This is in reference to SFF Oilgate, a corruption case where the SFF (a subsidiary of the Central Energy Fund) sold over 10 million barrels of the country’s strategic oil reserves to private companies at heavily discounted prices between December 2015 and January 2016.

South Africa then had the option to buy the oil back at an inflated rate.

Initially presented as a stock rotation, the sales were hidden, the buyers chosen without public tenders, and no replacement oil was ever bought. The sale also bypassed the National Treasury and the boards of the CEF and SFF, according to Daily Investor.

According to the Organisation Undoing Tax Abuse, investigations later revealed that the SFF’s then-acting CEO, Sibusiso Gamede, received millions in suspicious payments, alleged to be bribes.

In March 2018, the CEF went to court to dispute the notion that the sales were illegal.

In 2020, the Western Cape High Court overturned the sales, ruling that they were illegal, invalid, and the result of corruption.

However, because the oil had already been paid for, the government was ordered to repay the original purchase plus with interest, as well as any additional “out-of-pocket” expenses.

This meant that, while South Africa technically re-acquired the oil it sold, the debacle cost the government millions in legal fees and compensation.

Consequently, the state lacked the capital required to refill the tanks to its full capacity of 45 million barrels.

According to Botha, the 8 million barrels the country has now only equates to around two weeks of demand, well below the international benchmark of a 90-day emergency reserve.