Page 4 - AfrOil Week 44 2022

AfrOil COMMENTARY AfrOil

(Image: SAOGA)
SAPIA head comments on offshore

opportunities, onshore supply gaps

Tshifularo correctly notes the need for policy change but fails to consider that reforms should also

encompass opportunities for new budget revenue streams as well as government access to production

HIGHER crude oil prices have put extra eco- Natref plant) has experienced multiple outages
nomic pressure on many sub-Saharan Afri- this year. As a result, the country has become far
WHAT: can countries this year, and South Africa is more dependent on imported petroleum prod-
The head of SAPIA says no exception. Indeed, it has been feeling extra ucts than it was previously.
South Africa’s offshore pressure because the price rises triggered by the The reliance on costly imports is a source of
oil reserves will not bring Russia-Ukraine war (and the Western sanctions frustration for many South African consumers
retail fuel prices down.
that followed its outbreak) hit at a time when its – not just the owners of generators, but drivers
own domestic energy system was already under as well. The government did attempt to assuage
WHY: considerable stress. that frustration by reducing the fuel levy, which
The country has been hit
hard by this year’s rise in Much of this extra stress arises from the accounts for almost 30% of domestic prices.
petroleum product prices. fact that the country’s electricity infrastruc- However, the cut was only a temporary measure.
ture is notoriously unreliable. With no fast It expired on August 2, and Pretoria has ruled
WHAT NEXT: work-arounds available, many business and out the idea of making permanent reductions.
The issue ought to be residential consumers are using generators to The government’s refusal to bring the fuel
addressed with more compensate for rolling blackouts. However, the levy down has led some observers to argue that
flexibility in the future. cost of the diesel and gasoline needed to keep the conditions were likely to improve with the devel-
generators running has risen considerably this opment of offshore oilfields. Proponents of this
year because of developments on world markets. view believe that South Africa’s offshore zone –
At the same time, South African consumers which may hold as much as 27bn barrels of oil,
have not been able to access domestic sources of according to estimates made by the Petroleum
fuel. Three of the country’s four oil refineries (the Agency of South Africa (PASA) – could become
Sapref, Engen and Cape Town plants) are cur- a prime source of feedstock for refineries that
rently off-line, while the remaining facility (the can turn out fuel to supply the local market.

P4 www. NEWSBASE .com Week 44 03•November•2022