Cabinet has approved the submission of the South African National Petroleum Company (SANPC) Bill of 2024 to Parliament.
The bill provides for the establishment of the new state-owned company following Cabinet’s decision in June 2020 to merge PetroSA, the South African Gas Development Company (iGas), and the Strategic Fuel Fund Association (SFF).
“Local refining capacity in South Africa is largely held by international oil companies (IOC), which poses a risk to security of liquid fuels as IOCs are shutting down refineries,” said Minister in The Presidency, Khumbudzo Ntshavheni.
“The proposed Bill positions the company as the national champion that will hold oil and gas exploration rights on its own and hold shares through State carry method in privately held rights.”
In addition, Cabinet has approved the publication of the draft Petroleum Products Bill for public comment.
The purpose of this bill is to ensure the security of petroleum products and orderly development of the petroleum products sector in South Africa.
This will include the introduction of modern, cleaner products and renewable components which will improve the country’s energy mix.
“The bill will contribute towards the government priorities on economic transformation and job creation in the South African petroleum products sector governance and will address several concerns that were raised in relation to the administration of the Petroleum Products Act, 1977 (Act 120 of 1977),” said Ntshavheni.
What is SANPC?
The rationalization behind the merger of PetroSA, iGas, and SFF to form the SANPC was to have the country’s main petroleum entities under one umbrella to support the growth and development of the economy.
“With the combined strengths of the three subsidiaries, a solid financial position, and robust stakeholder support, the SANPC is well-positioned to leverage these benefits and seize the R95-billion market opportunity,” said the entity.
“The SANPC would be poised to become a leading player in South Africa’s energy sector, ensuring energy security, driving new technologies, developing, and enabling essential infrastructure, fostering strategic partnerships, and propelling social and economic development.”
One of the main goals of the SANPC will be to restore fuel refining capacity in South Africa to its former glory.
As many as six refineries once called South Africa home, however, only two are still operational which has led to the country having to import some 70% of all its petrol, diesel, and jet fuels from international suppliers.
The Minister of Minerals and Petroleum Resources has indicated that government is planning to restart both Sapref and PetroSA refineries, which are collectively capable of producing approximately 288,500 barrels of refined petroleum per day.
Additionally, once back up and running, these facilities will be upgraded to produce cleaner fuels with lower Benzene content in petrol.
Fuels currently sold in South Africa are not up to scratch with international standards which has seen many modern cars, especially hybrids and petrol autos that adhere to the latest European emissions regulations, not being introduced to our roads.
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