One government decision that could end in disaster for South Africa
The government’s decision not to expand or modernise the country’s fuel storage could lead to disastrous consequences for South Africans and the broader economy.
As a result of wasted years of inaction, South Africa faces a real threat of severe energy insecurity due to the conflict in the Middle East.
This is the feedback from Lungile Mashele, an energy economist, who is a specialist in energy and infrastructure at the Public Investment Corporation and a member of the board of the National Transmission Company of South Africa.
She warned that South Africa’s leadership has failed to take meaningful steps to protect the country from the risks associated with volatile global energy markets.
“The weaponisation of energy is not some distant academic threat; it is a direct, menacing danger and should be treated as such,” Mashele wrote in an opinion piece published on Business Day.
Mashele pointed to historical examples such as the 1973 oil embargo to illustrate how geopolitical tensions can cripple economies.
“The 1973 oil embargo crippled the world. Fuel shortages, soaring prices and rampant inflation showed that energy is not just a commodity but a powerful weapon in the hands of those who control it,” she said.
“Yet astonishingly, South Africa remains as exposed as ever, its leadership having done next to nothing to shield its people from the consequences,” Mashele said.
She warned that South Africa is particularly vulnerable as tensions threaten vital energy corridors such as the Strait of Hormuz.
“Even the possibility of disruption sends oil and gas prices soaring, yet South Africa remains passive.”
A major concern is the country’s shrinking refining capacity. Over the past several years, South Africa has closed most of its oil refineries, slashing domestic processing capacity from more than 700,000 barrels per day to just over 100,000 barrels.
Building reserve capacity is an urgent national priority
Mashele said this has left the country heavily dependent on imported refined fuel and exposed to fluctuations in global markets.
“South Africa’s energy crisis isn’t just misfortune; it’s the direct result of reckless, politicised and shortsighted decisions,” she said.
“The government’s failure to expand or modernise fuel storage has left South Africa without adequate reserves, exposing the nation further to market volatility.”
She warned that, as a result, local fuel prices are dictated by international developments rather than domestic policy.
Mashele said the current surge in energy prices could have far-reaching economic consequences, potentially pushing the global economy toward recession, and South Africa will bear the brunt.
She stressed that South Africa would be hit with high inflation and soaring electricity, food and fuel costs that choke every household and small business.
She also warned that building a resilient energy system should be an urgent national priority. “If we want to protect our country, economy and future, we must act decisively now.”
Despite these warnings, the Department of Mineral and Petroleum Resources has reassured the public that there is currently no immediate risk of fuel shortages.
The department said in a statement that it remains in continuous contact with oil companies to ensure supply stability.
It added that local producers such as NATREF, Astron Energy, and Sasol’s Secunda coal-to-liquids plant are still operating.
The department also said that much of the crude oil used locally is sourced from West Africa and other parts of the continent, reducing direct exposure to Middle Eastern supply routes.
Astron Energy’s refinery is currently offline due to planned maintenance, but the company has secured imports to compensate for the temporary shutdown.
“Unfortunately, the continued rise in international crude oil prices is expected to result in higher fuel prices at the pump from April 2026,” the department said.
“The under-recovery on fuel prices has been fluctuating since the onset of the conflict, and the department will continue to monitor the situation closely.”
“Further updates will be provided in due course ahead of the official April fuel price adjustments.”
Loading ...