Page 9 - AfrElec Week 20 2022

AfrElec POLICY AfrElec

South Africa’s ruling ANC party

draft policy envisions greater

fossil fuels investment

SOUTH AFRICA 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, especially
more fuel domestically. due to the high diesel prices. Disposable incomes
“In our country, fuel prices have been reach- of all citizens will be affected, and this is bound
ing record levels every month with no end in to lead to some level of discontent, especially if
sight,” the document states, as cited by News24. this affects the affordability of staple foods,” the
“The geopolitical tension in Eastern Europe document added, according to News24.
has been the biggest cause of the high fuel prices. As oil prices rose after Russia’s invasion of
The imposition of sanctions on Russia has meant Ukraine, South Africa reduced its fuel levy for
that 60% of Russia’s diesel exports no longer April and May, leaving a ZAR6bn ($374mn) hole
have a market because European countries have to be covered by the sale of 40% of the country’s
stopped buying from them. This is causing a strategic stocks. The draft anticipates a pro-oil
global shortage of diesel, resulting in diesel and policy position to provoke the green movement
paraffin prices rising faster than petrol.” but says the country has no alternative.
The other reason why oil prices have risen, “The growing opposition to oil and gas explo-
according to the ANC draft paper, is the “the ration by the anti-fossil fuel lobby groups needs
stance taken by OPEC+ to manage increases in to be confronted politically because it is clear that
the production of crude oil in support of higher South Africa is well endowed with oil and gas,
prices. OPEC+, which Russia is a member of, is which could alleviate crises such as the one we
limiting the availability of crude oil, leading to an have of high prices,” the document stated as cited
artificial shortage of oil.” by News24.™
South Africa, reports say, has not had much

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