Fuel Price Crisis | How long can South Africa keep the fuel pumps running if oil supplies tighten?

The International Energy Agency has cautioned that global oil reserves are diminishing due to the conflict in the Middle East, leading to a depletion of inventory buffers. South Africa, currently facing a fuel price crisis, holds a strategic fuel stock of 6.9 million barrels, which lasts approximately 30 days of crude oil needs.

Minister Gwede Mantashe stated that South Africa has diversified its supply sources to reduce reliance on Middle Eastern oil. However, the country's refining capacity is limited, with Sasol contributing to 40% of its needs and the rest being imported. South Africa is taking measures to enhance energy security, such as increasing strategic fuel stocks to cover 60 days of net fuel imports.

The Department commissioned a vulnerability assessment in 2024, revealing the need for stronger stockholding arrangements and increased domestic refining capacity. The draft Strategic Petroleum Stocks Policy, aimed at maintaining reserves equivalent to 60 days of net imports, is awaiting Cabinet approval for publication. Increased reliance on imported refined petroleum products has raised fuel costs, with the country's oil-import bill potentially being R76 billion higher between 2021 and 2024 if refined products constituted no more than 25% of total oil imports.

Global and regional peers are expanding capacity through new mega-refineries, leaving South Africa increasingly vulnerable. Despite government intervention not being planned, South Africans are bracing for record fuel prices, with petrol and diesel expected to reach record levels due to elevated international oil prices.