Of the six fuel refineries that operated in South Africa in 2019, only two are currently producing fuel, which reflects an 80% drop in output over three years, reports Bloomberg.
According to Avhapfani Tshifularo, executive director of the South African Petroleum Industry Association (SAPIA), the reason for this massive drop in production is because of “unplanned shutdowns.”
One such shutdown happened in August, when Sasol temporarily closed the largest refinery in the country due to a delayed shipment of goods, thereby flooding the market with imported fuels.
Moreover, South Africa’s shrinking refinery capacity could be impaired even further if the upgrades needed to meet new clean-fuel standards by 2027 are not implemented, said SAPIA.
By this time, the country aims to introduce a 10ppm sulfur content cap as well as a 1% benzene limit in its fuels.
As such, SAPIA said the industry will need financial support so that it can recover over the next four years, warning that the “current port infrastructure is not suitable for increased imports of liquid fuel for the long term.”
The below table, supplied by Bloomberg, details the output of South Africa’s fuel refineries if they were to realise their full capacity:
Potential fuel shortages
South Africa’s waning refinery fleet has caused the country to become increasingly reliant on imported fuels, which has significantly increased the risk of fuel shortages.
As it stands, Sasol’s temporary shutdown increased the local reliance on international fuels, and a delayed delivery of diesel in Mossel Bay is one of the reasons for the intense loadshedding South Africans have had to endure over the past months since Eskom has become highly dependant on diesel to generate electricity.
Additionally, diesel prices have been increasing at a rapid pace due to rising global demand and lacking supply of this fuel type.
Coupled with major strikes at South Africa’s main ports which have created severe backlogs and disruptions, there is a possibility that fuel pumps may start to run dry over the coming months if current market conditions persist.
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