What will happen to Shell petrol stations in South Africa

 ·8 May 2024

Liquid Fuels Wholesalers Association of South Africa’s CEO, Peter Morgan, says Shell’s exit from the country is unlikely to lead to mass job cuts and the closure of its petrol stations.

During an interview with Cape Talk, Morgan said Shell would probably follow the same approach it has taken in other African countries.

This would involve leaving a smaller sub-brand, Viva, in the country, where it will retain a percentage of ownership in its petrol stations.

According to Morgan, people need not worry because the company is not planning to shut down its retail network.

This means the roughly 600 forecourts and the jobs they provide are not immediately at risk, and the sites are not likely to close down entirely.

Morgan explained that the smaller sub-brand called Viva would likely be 80% owned by any given partner, while Shell would retain 20%.

In summary, Shell is not closing the service stations and going away. “This is a common pattern with all the oil majors throughout Africa.”

Morgan added that the reaction to reports of Shell exiting the country surprised him, as many oil companies—such as Caltex, Engen, and Puma—have already made similar moves, and they never made a ripple in the market.

“I’m not too concerned at all. We are not talking about losing jobs at petrol stations here,” he said.

Following a worldwide review of its downstream and renewables business, the oil giant confirmed on Monday (6 May) its intentions to exit shareholdings in its South African retail, transport, and refining operations.

The international oil giant has a significant presence in South Africa and has operated there since 1902. The Department of Mineral Resources and Energy had also granted it exploration rights in the country.

Shell’s exit coincided with BHP’s takeover of South African miner Anglo American.

This led to speculation that the move was a vote of no confidence in the country’s investment climate.

However, both BHP and Shell insist that the selloffs are for business reasons.

Read: 6 ‘shocks’ that cost South Africa R850 billion

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