US Trade Tariffs Yet to Affect Fuel Price in SA
US Trade Tariffs Yet to Affect Fuel Price in SA
Natalie Nyathi
Mineral and Petroleum Resources Minister Gwede Mantashe stated on October 16 , yesterday, during a session in the National Council of Provinces that trade tariffs imposed by the United States are not currently impacting fuel prices in South Africa.
Mantashe explained that South Africa’s fuel prices are influenced more by the price of crude oil, refined petrol products, and the rand/US dollar exchange rate.
“While fluctuations in global markets and currency movements can impact fuel prices, US tariffs have not had a direct influence on South African fuel pricing to date,” he said.
Mantashe emphasized that because South Africa does not export any fuel to the US, there has been no impact on the local fuel price. He noted that South Africa imports the majority of its fuel from countries in Asia and the Middle East, including India, Italy, Oman, Qatar, and Bahrain. He reassured that “the security of fuel supply remains unaffected” by the US tariffs.
Mantashe highlighted that South Africa’s “diversified sourcing of fuel from various international suppliers provides sufficient resilience against potential disruption.” He stated that “the only way to secure affordable fuel is through exploration and increasing the country’s refining capacity.” He expressed concern that “exploration efforts are regularly being blocked.”
The local petroleum sector is still mostly dependent on imports. Mantashe noted that “oil reserves sold during the Covid-19 pandemic have not been replenished.” He warned that “the decline in refining capacity is a risk to the economy and why dormant refineries need to be revived urgently.”
South Africa relies heavily on petroleum, including power generation. The country imports most of its crude oil from the Middle East, with Saudi Arabia being the largest supplier. Other significant sources include Nigeria and Angola. When domestic refining capacity falls short, South Africa also imports refined petroleum products such as diesel and petrol from countries like India and Singapore.
South Africa has a total installed capacity of 520,000 barrels per day of crude oil refineries. There is also a Coal to Liquid refinery producing 150,000 barrels per day and a Gas to Liquid refinery with a capacity of 45,000 barrels per day. However, much of South Africa’s refining capacity remains offline.
The South African government is looking to encourage local and foreign investors to revive and expand the idle refineries and build new ones to ensure energy security. There are plans to upgrade the Sapref refinery to a capacity of 600,000 barrels per day.
