Warning about South Africa’s shrinking refinery capacity

South Africa’s shrinking refinery capacity could be impaired further without financial support for upgrades needed to meet new clean-fuel standards, according to an industry lobby group.

Of six refineries operating nationwide in 2019, only two are currently producing fuel, reflecting an 80% output drop due to unplanned shutdowns, Avhapfani Tshifularo, executive director of the South African Petroleum Industry Association, said in a statement.

Cleaner fuel regulations that go into effect in 2027 will require planning and funding to meet the specifications.

“Pending decisions by refiners on the operations of their facilities, will have a direct impact on employment and potentially result in a larger dependency on imports,” he said. “Without a financial support mechanism, it would be difficult to justify the refineries upgrades.”

The 108,000-barrel-a-day Natref plant, owned by Sasol Ltd. and TotalEnergies SE, was forced in July to shut following late oil shipments.
That meant, for a range of reasons, all of South Africa’s oil refineries weren’t producing, and highlighted the country’s growing dependence on fuel imports.

Temporary relief could come as Astron Energy’s 100,000-barrel-a-day Cape Town refinery, which is majority owned by Glencore Plc, resumes production after rebuilding a section of the plant damaged by an explosion in 2020.

Still, a greater reliance on imports also presents difficulties, Tshifularo said. “Our current port infrastructure is not suitable for increased imports of liquid fuel for the long term.”