South African oil refineries face specter of shutdown

South Africa’s oil refineries are facing the specter of closure, as the country intends to implement a clean fuel policy, which could lead to an increase in the country’s imports of black crude; to meet local demand.

South Africa’s imports of petroleum products are expected to rise nearly 3 times by next year, compared to pre-coronavirus levels, due to the closure of local refineries.

Energy consultancy Seatac said Africa’s largest industrial country already relies on imports to meet 60 percent of its fuel needs.

clean fuel policy

SITAC added that any increase in shipments of oil imported from abroad will require improvements to existing storage facilities, ports and pipelines.

Furthermore; The clean fuel policy, which is due to come into effect next year, increases the likelihood that some oil refineries will have to shut down permanently; for its inability to meet the new standards; This means that just over a third of domestic oil refineries are still operating.

African governments and industry are working on setting continent-wide standards to limit the amount of sulfur in gasoline and diesel, which would require an investment of $16 billion in infrastructure development.

oil in south africa
An oil refinery in South Africa – archive

South Africa is on a faster track to implement these standards, but its refining capacity has already been hit by a host of obstacles such as unplanned shutdowns of oil refineries and faltering supplies, according to the local BusinessTech website.

The closure of the Engin oil refinery, the shortage of raw materials for the state Petrosa gas-to-liquid plant, and the explosion of the Cape Town refinery, owned by Glencore, affected the production capacity of South African oil, which has already been reduced due to the epidemic.

Closure of oil refineries

South African Engine Corporation had revealed its plan to convert the Durban refinery into a terminal; The refinery has been closed since a fire and explosion broke out on 4 December.

The country’s largest plant, Sabrief, owned by Anglo-Dutch Shell and Britain’s BP, has also halted operations pending sale.

Shell was subjected to local resistance from South Africans, which prevented it from continuing its exploration operations off the southern coast, in light of accusations of harming marine life and disrupting fishing.

Sasol CEO Fleetwood Grouper said earlier this year that his company and Total Energy had not yet made a decision about the future of the Natriv refinery.

The Natriv refinery has a capacity of 108,500 barrels per day.

SITAC believes that oil product pipelines from the port of Durban will need to be modified to accommodate additional supplies of oil imports, and additional storage for gasoil and jet fuel may be required.

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