The government has announced the creation of a new state-owned oil and gas company South African National Petroleum Company (SANPC), aimed at strengthening national energy security, fostering economic growth, and stabilizing struggling state entities. The move comes amid growing concerns over the country’s increasing reliance on fuel imports despite having significant domestic refining potential.
A Shift Toward Energy Independence
Minerals and Petroleum Resources Minister Gwede Mantashe emphasized the urgent need to reverse the country’s dependence on imported fuel, noting that local refining capacity has sharply declined.
“Our view is that this can be turned around once those refineries are working. It has all the opportunities, it has all the depots around, and it can do well. We must just revive those refineries,” Mantashe stated.
He revealed that only two refineries are currently operational, with the latter owned by Sasol. This marks a drastic decline from the early 2000s when the country was a net exporter of refined petroleum products.
“Pre-2006, we were actually a net exporter of finished products. By 2010, we were importing 10-20% of what we consumed. Today, depending on refinery maintenance, we import between 60 and 70%,” he said.
Focus on Refinery Revival
A key priority is reviving PetroSA’s refining capacity to reduce reliance on imported fuel. Mantashe confirmed that PetroSA will retain its current leadership with a mandate to improve underperforming refining operations before being transferred to the new entity. This step is intended to prevent saddling the new company with existing liabilities.
The government insists that accelerating refinery rehabilitation is critical for long-term energy stability. With global energy markets shifting, officials argue that domestic refining must be prioritized to shield the economy from external supply shocks.
As the new entity takes shape, stakeholders will be watching closely to see if it can deliver on its promise of energy security and economic growth.
