South Africa’s oil-import bill could have been R76 billion lower if it had not closed a large part of its refinery capacity, according to the country’s central bank.
The spending could, on average, have been 6.1% less in the four years through 2024 if the cap on the import of refined petroleum products was at 25%, the Reserve Bank said in an economic note published last week.
Refinery closures have cut petroleum-related manufacturing output by roughly 20% since 2019, displacing an estimated 5,400 direct and indirect jobs, it said.
South Africa’s refining capacity has halved over the past decade and imported refined products now supply more than half of domestic fuel demand, raising exposure to global price shocks and shipping disruptions, the Reserve Bank said.
This dependence also increases South Africa’s vulnerability to rand volatility, it said.
The continent’s biggest economy only has two operational crude-refining facilities, Sasol’s Natref facility and Astron Energy’s plant in Cape Town, with a combined total capacity to process about 208,000 barrels a day.
The Central Energy Fund (CEF) said last week it intends to rebuild the Sapref refinery south of the port city of Durban, which was idled after 2022 floods in the KwaZulu-Natal province damaged the facility, targeting throughput of 400,000 barrels daily.
South Africa’s petrol and diesel prices reached record levels earlier this year as the cost of oil surged due to the war in Iran.
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