South Africa is planning to build up its emergency oil reserves for the first time since the apartheid government stockpiled crude in the 1970s. Back then, United Nations sanctions pushed the country to construct the giant 45-million-barrel storage hub at Saldanha Bay. Since 1994, though, those reserves have been steadily run down, including a controversial 2015 sale of 10 million barrels that was later found to be unlawful.
What the new plan asks for
Cabinet approved the outline this month, and the Department of Mineral Resources and Energy published a draft policy on 9 July for public comment. It wants reserves to cover 60 days of demand, roughly two-thirds crude oil and the rest refined products, which works out to about 36 million barrels. The strategic stock would be split around 70% crude and 30% refined products, managed by a state petroleum company, while licensed fuel wholesalers would have to hold 21 days of their own. The plan proposes starting at 60 days and phasing up to 90 over the longer term, an idea energy minister Gwede Mantashe first floated at a fuels industry gathering in June. The Treasury and the state company would work out how to pay for and guarantee it all.
Why now
The urgency is about supply shocks. South Africa's reserves currently sit at around 7.7 million barrels, barely two weeks of cover, which lawmakers judged far too thin. An official estimate in March put crude reserves at about 8 million barrels, and the department says the country needs 10 million just to replenish stock it has sold or rotated. With so much fuel arriving by sea, chokepoints like the Strait of Hormuz, where traffic has slowed during the Iran conflict, leave the economy exposed. The government estimates every single day without fuel would cost the economy about a billion rand.
South Africa is not alone: Morocco, Uganda and Ghana have all announced moves to shore up their own fuel supplies this year. The draft still has to survive public comment before any barrels are bought. But the direction is set: after three decades of drawing down, the country wants a cushion again.
