South Africa’s refinery woes raise reliance on fuel imports
South Africa, which buys nearly a third of its fuel requirements from overseas, is undergoing a surge in imports with the refining industry walloped by the coronavirus and anticipated clean-fuel regulations.
The shrinking refining industry could add to job loses in a country already facing a 30% unemployment rate. The pandemic has squeezed refiners’ margins while a pending clean-fuels policy is likely to increase their costs as they upgrade machinery. Africa’s most industrialised nation imported 135 000 barrels a day of clean fuels last year, and shipments are expected to rise 16% in 2020, according to energy consultant Citac.
“It goes without saying that if we lose current refinery capacity, more products will be imported to ensure the security of supply,” said Avhapfani Tshifularo, executive director of the South African Petroleum Industry Association. The trade body is in talks with the government about challenges “such as demand destruction due to the Covid-19 pandemic, pressure to decarbonise and low refinery margins.”
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