South Africa has proposed a new strategic fuel stocks policy that would require both the state and private fuel companies to maintain mandatory reserves, as Africa’s most industrialised economy seeks to strengthen its preparedness for global oil supply disruptions.
The draft policy, issued by the Department of Mineral and Petroleum Resources for public consultation, comes amid heightened concerns over energy security as tensions in the Middle East continue to disrupt shipping through the Strait of Hormuz, a vital route for global oil and liquefied natural gas exports.
Under the proposal, all licensed oil and fuel wholesalers and importers would be required to hold fuel stocks equivalent to 21 days of supply. Seventy percent of the reserves would consist of crude oil, while the remaining 30% would comprise refined products such as diesel and jet fuel.
The policy also calls for the state to maintain strategic reserves covering 60 days of supply, following the same allocation between crude oil and refined fuels. The reserves could be released only after the government declares a state of emergency in response to a major supply disruption.
“There is a compelling need for South Africa to have a Strategic Stocks Policy to enhance the state of readiness in the event of major oil supply disruptions,” the draft policy read.
If approved, the plan would mark the first major expansion of South Africa’s strategic fuel reserves since the 1970s, when the apartheid-era government built underground crude oil storage facilities at Saldanha on the country’s west coast. However, the country has never established mandatory strategic stockholding levels.
The proposed state reserves would be managed at storage facilities in Saldanha and Milnerton.
South Africa has lost nearly half of its domestic refining capacity in recent years, leaving it increasingly dependent on imported petroleum products. Government estimates show the country consumes about 27 billion litres of oil products annually.
The Fuels Industry Association of South Africa, which represents oil companies operating in the country, did not immediately respond to requests for comment.
