South Africa is set to run out of natural gas in two years after Sasol announced that it will cut natural gas production in June 2026. This poses a big threat to South Africa\u2019s manufacturing sector.<\/p>\n\n\n\n
This is the warning from Jaco Human, executive officer of the Industrial Gas Users Association of South Africa (IGUA-SA).<\/p>\n\n\n\n
Starting June 2026, Sasol will stop supplying gas from Mozambique, halting supply to downstream consumers in KwaZulu-Natal, Gauteng and Mpumalanga. This will lead to a \u2018day zero\u2019 for gas users.<\/p>\n\n\n\n
Human said Sasol\u2019s decision to cease the gas supply is driven by the dwindling supply and their decarbonisation needs. Gas has a finite supply as a natural resource, making shortage inevitable.<\/p>\n\n\n\n
\u201cIt\u2019s not a new problem to the government or industry players. However, it is now real,\u201d said Human.<\/p>\n\n\n\n
The sudden decision by Sasol means the threat of day zero to South African households and the manufacturing sector is more urgent.<\/p>\n\n\n\n
According to Human, Sasol\u2019s plan to stop production will devastate the economy and could threaten upwards of 60,000 jobs.<\/p>\n\n\n\n
The looming gas crisis is particularly concerning as electricity supply, the primary substitute for natural gas, is threatened by load-shedding.<\/p>\n\n\n\n
Many households rely on gas for cooking, lighting, and heating. In the manufacturing sector, gas is the cheapest source of energy.<\/p>\n\n\n\n
There is currently no alternative to gas for most manufacturing industries which use it, especially given the unstable electricity supply.<\/p>\n\n\n\n
Other energy sources, such as diesel, fuel, and oil, are prohibitively expensive. It means many large-scale manufacturers depend on gas.<\/p>\n\n\n\n
Sasol\u2019s proposed cuts will cause an immediate halt in production in these industries. According to Human, there is no plan to transition away from natural gas.<\/p>\n\n\n\n
Last year, the government promised a major gas plan, laying out the next steps for a transition, to be released by the end of 2023. No such plan has yet been finalised.<\/p>\n\n\n\n
South Africa is unlikely to find new domestic sources of natural gas within ten years, said Human.<\/p>\n\n\n\n
In all likelihood, the country will rely on imported gas from mid-2026. The high cost of importing gas will put a squeeze on manufacturing firms in the years to come if the government fails to intervene.<\/p>\n\n\n\n
This article was first published by Daily Investor and reproduced with permission. Read the original here<\/strong><\/a>.<\/em><\/p>\n\n\n\n
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