Running Out Of Gas

South Africa at risk of losing its refining industry

The refining industry in South Africa is under siege and could undergo major changes in the wake of the Covid-19 pandemic, which hit the country hard.  With limited domestic oil resources, the largely outdated refineries have to make tough choices.  South Africa’s refineries are too old and too small to compete in the global market with large, efficient export refineries.  Even for the domestic market, they have to modernize if they want to be able to produce the low Sulphur fuels that the South African government mandates from September 2023.

At the moment it appears unlikely that South Africa’s refineries will survive.  According to the South Africa Petroleum Industry Association (SAPIA), the country, which currently has more than 700,000 b/d of refining capacity, risks becoming fully dependent on refined product imports by the end of 2023.

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