Global oil prices have climbed dramatically since the war, prompting warnings that high fuel prices could drive inflation above 5 per cent in Australia. AFP
South Africa is planning to boost its petroleum reserves to about 36 million barrels, 56 years after the Apartheid era.
The proposal was disclosed by South Africa’s Department of Mineral Resources and Energy (DMRE) through a draft Strategic Petroleum Stocks Policy released for public consultation.
The move comes as the country seeks to strengthen energy security following concerns over global oil supply disruptions triggered by Iran and US war, which had threatened supplies, sending global oil prices higher worldwide.
Traffic through the Strait of Hormuz, one of the world’s most important oil shipping routes, slowed significantly during the crisis, raising fears of prolonged supply shortages.
The draft policy says the initiative is aimed at reducing South Africa’s exposure to volatile international oil markets and geopolitical crises.
“As a net importer of crude oil and increasingly refined products, the country remains vulnerable to international supply chain disruptions, price volatility, and geopolitical shifts. This Strategic Petroleum Stocks Policy establishes a robust framework for the mandatory holding of emergency reserves to insulate the South African economy,” the policy stated.
Under the proposal, the government intends to maintain emergency oil reserves equivalent to 60 days of national demand, with about two-thirds held as crude oil and the remainder as refined petroleum products.
The South African government said it is working with the National Treasury to establish financing arrangements that will support the acquisition and maintenance of the country’s strategic petroleum reserves.
“The National Treasury and the state-owned South African National Petroleum Co. will develop financing mechanisms and instruments for the financing and guaranteeing strategic petroleum stocks,” the DMRE stated.
According to the draft policy, South Africa consumes an average of 27 billion litres of petroleum products annually, while the transport sector relies on liquid fuels for about 90% of its energy needs.
The government noted that petroleum remains a major contributor to the country’s economy, warning that any disruption in fuel supply could result in significant economic losses and widespread social disruption.
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Beyond government-owned emergency reserves, the policy would also require fuel manufacturers and wholesalers to maintain additional inventories of refined petroleum products.
“The policy introduces a mandatory obligation for licensed manufacturers and wholesalers to maintain an additional 14 days of refined product stocks, such as diesel, petrol and jet fuel,” the draft policy stated.
The government explained that the arrangement would allow the state to provide long-term energy security through strategic reserves, while private sector operators would strengthen short-term supply resilience, helping cushion the economy against global supply chain disruptions.
South Africa remains a net importer of petroleum products, unlike Nigeria, which has significantly reduced its dependence on imported petrol following the ramp-up of operations at the Dangote refinery.
