Page 5 - DMEA Week 04 2023

DMEA COMMENTARY DMEA

Citac highlighted the main factors in the as diesel and jet fuel will still be severely lacking.
decline as “the closure of the Engen Refinery [in
Durban], the lack of gas or economically viable Future plans
condensate feed to run the PetroSA refinery, and PetroSA was expected to run out of funds and
the explosion at the Astron Refinery [in Cape gas by 2022; however, former CEF chairman
Town] in mid-2020.” It added that the decline Luvo Makasi said in 2018 that the company
had been more rapid because of Engen’s decision could be saved. He mentioned that year that
to close its refinery in December 2020 rather “we need to set out the production problems at
than 2023 following years of losses and a fire. PetroSA, and we think by doing that [we will]
The disconnect between hydrocarbon pro- sort out the capacity of the refinery.”
duction and downstream capabilities is particu- The state-owned entity is currently hoping
larly pronounced in South Africa, which has to secure new gas from Brulpadda and Lui-
been wrestling with issues around supply and perd. Efforts are clearly ongoing to stabilise the
prices of jet fuel, diesel and gasoline. loss-making PetroSA before it is merged with
With the refining slates largely out of com- iGas and the Strategic Fuel Fund to create the
mission, shortages of jet fuel are acute, and there new South African National Petroleum Co.
doesn’t seem to be an easy solution. PetroSA’s (SANPC). While moves to rehabilitate Mos-
reinstatement of its GTL refinery is unlikely to sel Bay will support PetroSA’s performance,
resolve these issues, as its ability to process gas it is unlikely to provide the structural changes
into gasoline means the supply of key fuels such required to balance the country’s fuel slate.™

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