Page 10 - AfrOil Week 21 2022

AfrOil POLICY AfrOil

South Africa’s ruling ANC party draft policy

envisions greater fossil fuels investment

ANGOLA SOUTH Africa’s ruling African National Con- exploration for oil and gas but the potential for
gress (ANC) party is working towards putting both is high. In February 2019, TotalEnergies
forward a policy to advance the country’s hydro- discovered about 1bn barrels of oil at an off-
carbon potential in a bid to ease the impact of shore field. The find, BusinessTech reported at
global oil price increases. the time, was enough to supply the country for
The initial proposal is contained in the ANC’s four years. The country has resources of approx-
draft economic policy discussion document to imately 9bn barrels of oil, and roughly 60 trillion
be tabled at the party’s conference in July 2022. cubic feet of gas offshore, a local law firm, Cliffe
News24, a local news channel, obtained the Dekker Hofmeyr said.
paper, which it said will be circulated among According to the ANC policy draft, South
ANC members this week. Africa has been caught in the “middle of a global
The impact of the Russian invasion of economic war,” with high fuel prices beginning
Ukraine on oil and gas markets and various to have a knock-on effect on the country.
supply chains features heavily in the draft as the “Cost of public and private transport has
main reason why Africa’s most-industrialised increased and is likely to increase further. The
economy must shift from imports and produce cost of producing food will skyrocket, espe-
more fuel domestically. cially due to the high diesel prices. Disposable
“In our country, fuel prices have been reach- incomes of all citizens will be affected, and this
ing record levels every month with no end in is bound to lead to some level of discontent,
sight,” the document states, as cited by News24. especially if this affects the affordability of sta-
“The geopolitical tension in Eastern Europe ple foods,” the document added, according to
has been the biggest cause of the high fuel prices. News24.
The imposition of sanctions on Russia has meant As oil prices rose after Russia’s invasion of
that 60% of Russia’s diesel exports no longer Ukraine, South Africa reduced its fuel levy for
have a market because European countries have April and May, leaving a ZAR6bn ($374mn) hole
stopped buying from them. This is causing a to be covered by the sale of 40% of the country’s
global shortage of diesel, resulting in diesel and strategic stocks. The draft anticipates a pro-oil
paraffin prices rising faster than petrol.” policy position to provoke the green movement
The other reason why oil prices have risen, but says the country has no alternative.
according to the ANC draft paper, is the “the “The growing opposition to oil and gas
stance taken by OPEC+ to manage increases in exploration by the anti-fossil fuel lobby groups
the production of crude oil in support of higher needs to be confronted politically because it is
prices. OPEC+, which Russia is a member of, is clear that South Africa is well endowed with oil
limiting the availability of crude oil, leading to and gas, which could alleviate crises such as the
an artificial shortage of oil.” one we have of high prices,” the document stated
South Africa, reports say, has not had much as cited by News24. ™

Exploration is underway in several offshore basins (Image: Impact Oil & Gas)

P10 www. NEWSBASE .com Week 21 25•May•2022