Corrupt deal could cause South Africa to run out of petrol

The ‘SFF Oilgate’ scandal from 2016 could be the reason South Africa experiences a shortage of fuel amid the ongoing Middle East war.

This is because South Africa’s strategic petroleum reserves have never recovered from the corrupt sales made by the Strategic Fuel Fund (SFF), for which the government and taxpayers paid dearly.

Therefore, compounded by South Africa’s diminished domestic refining capacity, the country finds itself in a highly vulnerable position.

Ashburton Investments’ head of fixed income, Albert Botha, explained in a recent press release that the US/Israel-Iran war has driven global oil prices to near-record highs.

The effective closure of the Strait of Hormuz, a narrow shipping corridor through which around 20% of the world’s oil supply is transported, has seen oil prices skyrocket.

On the morning of 23 March 2026, Brent crude oil stood at $113 per barrel, up from $72 the day before the Iran war started.

Botha said this, compounded by a weak rand, trading at around R17.20/USD, puts the rand price of a barrel of oil more than 90% higher than at the start of the year.

It should be noted that both oil prices and the rand recovered slightly after United States President Donald Trump announced that he would be postponing strikes on Iran. Iran has denied that these conversations took place.

However, these prices remain far higher than they were prior to the conflict, and have proven highly volatile over the past month.

Regardless, Botha emphasised that price is not the only concern, warning that if the conflict persists, domestic fuel availability could also become a problem.

The Department of Mineral and Petroleum Resources (DMPR) has sought to quell fears of a fuel shortage.

On 10 March 2026, the DMPR released a press statement saying that while prolonged geopolitical tensions may exert pressure on international oil prices, “the department wishes to assure the public that there is currently no immediate risk of fuel shortages in South Africa”.

“Oil companies that currently import refined petroleum products from countries affected by the conflict are actively exploring alternative supply sources to ensure uninterrupted fuel availability in the domestic market,” the department said.

Despite these assurances, Botha warned that availability will remain a concern as the conflict rages on, with South Africa in a particularly vulnerable position due to corruption that dates back more than a decade.

Paying the price for corruption

Botha said South Africa’s strategic petroleum reserves currently stand at 7.7 to 8 million barrels, far below its 45-million-barrel capacity.

He explained that this is because South Africa’s reserves have never recovered from the 2016 reserve sales that the High Court later ruled to be corruption.

Botha is referring to what is often called ‘SFF Oilgate’, a major corruption case that South Africa has yet to recover from. 

Between December 2015 and January 2016, the SFF, a subsidiary of the Central Energy Fund (CEF), sold over 10 million barrels of the country’s strategic oil reserves to private companies at heavily discounted prices, with the option of South Africa buying the oil back at an inflated rate.

Initially presented as a stock rotation, the sales were hidden, the buyers chosen without public tenders, and no replacement oil was ever bought. The sale also bypassed the National Treasury and the boards of the CEF and SFF.

According to the Organisation Undoing Tax Abuse, investigations further revealed that the SFF’s then-acting CEO, Sibusiso Gamede, received millions in suspicious payments, alleged to be bribes, around the time of the deals.

In March 2018, the CEF went to court to challenge the sales as illegal, attempting to overturn them. Two years later, the Western Cape High Court overturned the sales, ruling that they were illegal, invalid, and born of corruption.

However, since the oil was already paid for, the government was ordered to repay the original purchase price, plus interest, as well as any relevant “out-of-pocket” expenses.

Therefore, while the country technically recovered the oil that had been sold, the botched deal cost the government millions in legal fees and compensation.

This means that the state lacked the significant capital required to refill the tanks to their initial 45 million barrel capacity, especially at modern market prices.

Today, according to Botha, South Africa’s reserves stand at around 8 million barrels, equal to only around two weeks of demand. This is far below global benchmarks, which require reserves for a minimum of 90 days.