South Africa could face a petrol shortage: report
Strategic Fuel Fund chair Riaz Jawoodeen has warned that the risk of petrol and diesel shortages in South Africa could lead to an Eskom-like crisis.
The Rapport newspaper quoted Jawoodeen as saying that South Africa does not have a crude oil shortage, but rather a problem with product shortages.
The reason for these product shortages (which includes petrol and diesel) is a lack of refinery capacity.
According to the report, the risk of petrol and diesel shortages is increasing because international companies are not willing to invest in the country’s four oil refineries.
The capacity of the four refineries – Chevron, Engen, Shell and BP, and Total – have dropped because of stricter environmental requirements on the production of fuel.
To address this problem, the Strategic Fuel Fund wants to build storage facilities for petrol and diesel using the money from the sale of 10 million barrels of crude oil in December.
The Department of Energy’s decision to sell the country’s strategic fuel stock came under fire recently, partly because of the low price at which it was sold.
“This fuel stock was negligently sold at $28 a barrel when the current price is around $49 a barrel,” said the DA.
The DA said the sale has left the country vulnerable, with only enough oil in reserve to sustain SA for less than a day.
Jawoodeen dismissed the DA’s concern, saying South Africa does not have a crude oil shortage, and the sale did not put the country’s strategic supplies at risk.
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