South Africa is taking decisive steps to reduce its reliance on imported refined petroleum products, with the government looking to fast-track legislation and expand local refining capacity.
Speaking in Parliament during the tabling of the Department of Mineral and Petroleum Resources’ 2026/27 budget earlier this week, Minister Gwede Mantashe said the country remains overly dependent on imported fuel, leaving it vulnerable to global price shocks and supply disruptions.
IOL previously reported that there is also growing concern that much of the country’s reserves are held as crude oil, meaning that even in the event of a release, the supply cannot be used immediately at scale without being refined into usable fuel such as petrol and diesel.
That could prove to be a major problem for South Africa, as much of the country’s refining capacity has declined in recent years.
“The reality confronting us is that South Africa remains overly dependent on imported refined petroleum products. It is neither sustainable nor just for a country with significant mineral and petroleum potential, such as ours, to remain exposed to external supply shocks in this manner,” Mantashe said.
“This is precisely why our sustained focus on developing the Upstream Petroleum Industry and expanding our refining capacity remains correct, despite persistent pressure from certain environmental lobby groups. The fact remains that petroleum security is not a theoretical debate, but an economic necessity and a national imperative.”
His comments come as South Africans face significant increases in fuel prices. Petrol prices rose by R3.27 per litre for 95 Unleaded, while diesel increased by R6.19 per litre.
These increases were driven primarily by rising global oil prices, geopolitical tensions in the Middle East, and the implementation of the Slate Levy, which compensates fuel companies for fluctuations in fuel prices over the previous months.
The fuel increases have led to higher costs for transport services, with traditional taxi fares rising and e-hailing services passing on the additional expenses to commuters.
IOL previously reported that South Africa’s inflation rate accelerated sharply in April as record fuel price increases filtered through the economy, pushing annual consumer inflation to its highest level since August 2024.
To address the challenges, Mantashe said the government is fast-tracking the South African National Petroleum Company (SANPC) Bill, which will operationalise the SANPC as a strategic state-owned entity.
Once fully functional, the SANPC will allow the state to play a meaningful role in South Africa’s oil and gas sector.
“For this reason, it is imperative that we accelerate processing of the South African National Petroleum Company Bill (SANPC) to enable the full operationalisation of the SANPC as a strategic state-owned entity to enable meaningful and strategic state participation in the oil and gas sectors, as envisioned in the Upstream Petroleum Resources Development Act (UPRDA),” Mantashe told parliament.
“While global fuel supply challenges persist, I would like to assure the people of South Africa that we have sufficient fuel supply to meet demand and that our fuel supply remains stable.”
According to reports, Offshore Oil and Gas Exploration has indicated that South Africa’s coast and adjoining waters could hold approximately nine billion barrels of oil, enough to meet around 40 years of national oil consumption and 11 billion barrels of oil equivalent in natural gas.
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