Mantashe warns economy will lose R1bn a day if SA runs out of fuel
The South African government is proposing a new mandate requiring private oil companies to maintain 21 days of backup fuel reserves. This policy aims to prevent economic losses of R1bn per day during potential supply shocks.
Why it matters
Energy security is critical for South Africa's industrial stability, and this shift forces private entities to bear significant infrastructure costs.
Private oil companies and wholesalers will be legally compelled to store 21 days of backup fuel at their own expense, in a big pivot that transitions the country from a voluntary into a mandatory regime, forcing the private sector to store significant volumes of backup fuel alongside the government.
For its part, the government will hold 60 days of net-import reserves — with the department of mineral & petroleum resources arguing its proposal will go a long way in preventing the country from running out of fuel in the event of global supply shocks.
The proposal is contained in a public consultation document, published last week.
Companies and the government will be mandated to maintain backup stock made up of 70% crude oil and 30% finished, refined product such as petrol, jet fuel and diesel. South Africa, Africa’s most industrialised economy, consumes about 67-billion litres of fuel annually.
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