90-day deadline for South Africa to solve its petrol crisis

The Automobile Association of South Africa (AA) has demanded that the Central Energy Fund (CEF) produce a public plan to address the country’s fuel reserve crisis within the next three months.

Last week, the AA issued an open letter to the Ministry of Finance condemning the recent news that the Road Accident Fund (RAF) wants to raise a key fuel tax from R2.25 to R3 per litre.

It said the proposal to increase fuel taxes, which was outlined in the RAF’s report for the 2025/26 financial year, was incredibly out of touch with consumers at a time when petrol and diesel prices have soared past R30 per litre.

“Calling for R3 per litre is what the AA terms as consumer tone-deafness, ignoring completely an embattled consumer facing rising inflationary pressure off the back of interest rates, fuel costs and basics like groceries and school fees increasing almost monthly,” it said.

In the letter, the AA highlighted that South Africa’s domestic fuel refining capacity has collapsed in recent years and that the government should be working to address this issue, rather than putting even more pressure on consumers.

Furthermore, South Africa’s strategic fuel reserves have fallen critically low, with Mineral and Petroleum Resources Minister Gwede Mantashe revealing that the country only has 6.9 million barrels left.

This is only enough for 30 days of refining at South Africa’s current capacity of 200,000, making the country more vulnerable to shocks in the global oil market.

The AA pointed out that the CEF sold off strategic crude stocks in 2015, and has allowed PetroSA’s refinery in Mossel Bay to remain largely idle since 2020.

PetroSA, a gas-to-liquid fuel refinery, stopped operating six years ago because its natural gas feedstock ran out.

The association called on Dr Tshepo Mokoka, the newly appointed Group CEO of CEF, to address the country’s lack of a fuel buffer, which leaves South Africa vulnerable to global events.

It published a list of demands addressed to various state actors, including the CEF, where it asked for a public plan, within 90 days, to rebuild South Africa’s strategic fuel reserve and settle PetroSA’s future.

The AA’s other demands to address South Africa’s fuel crisis included:

• National Treasury: a further R3-a-litre cut to fuel taxes such as the general fuel levy before the November adjustment, paid for by cutting wasteful spending rather than borrowing.
• The Department of Mineral and Petroleum Resources: a public review of the basic fuel price formula, including why fuel refined in South Africa is priced as though it were imported.
• Employers: a review of transport allowances now and, where the work allows, one remote working day a week. For a five-day commuter, that cuts the weekly transport bill by a fifth.

South Africa’s fuel refineries have collapsed

PetroSA’s Mossel Bay facility is not the only refinery that has shut down in recent years.

In 2019, South Africa’s refineries were able to supply 78% of local demand, which has fallen to just 39% in 2026.

Two other key plants, the South African Petroleum Refinery (SAPREF) and Engen Refinery (ENREF), ceased operations due to a combination of economic concerns and unfortunate events.

SAPREF’s facility in Durban was severely damaged by the floods that struck KwaZulu-Natal in early 2022.

The site, which was operated under a joint venture between Shell and BP, later sold its refinery assets to the CEF for R1.

The Engen refinery, meanwhile, was damaged when an explosion and fire occurred at the site in December 2020.

Operations at the refinery were shut down, and the location was converted into an active commercial fuel storage and import terminal.

Engen decided not to restore the refinery because the ageing 1954-era facility was no longer commercially viable, and rebuilding it would have required upgrades to meet new government clean-fuel and emissions regulations.

These closures have put immense pressure on South Africa’s remaining refineries to supply fuel for the domestic market at a time when global oil prices have surged past $100 per barrel.

Notably, Sasol’s Secunda plant uses a coal-to-liquid process to convert solid coal into synthetic petroleum products, leveraging a resource South Africa has in abundance.

Astron and Natref, meanwhile, convert imported crude oil into refined petroleum products. Together, these three sites supply roughly 40% of South Africa’s domestic fuel demand.