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SA dependence on petrol imports growing

Cape Town - South Africa is becoming more and more dependent on imported petrol and diesel, MPs heard on Tuesday.

"Increasingly, we are relying a lot on imports of finished products; these figures have been climbing in recent years," energy department deputy director general Tseliso Maqubela told Parliament's energy portfolio committee.

Maqubela, who heads the department's petroleum and petroleum products regulation branch, was briefing the committee on the problems facing the country's liquid fuels sector.

Speaking to Sapa during a break in proceedings, he said 4 billion litres of diesel and 1.2 billion litres of petrol were imported last year.

"Demand exceeds supply and we therefore need to import."

Maqubela also confirmed that South Africa's strategic stocks of crude oil were "currently very low".

About 10.5 million barrels of crude were stored, or just over three weeks' supply.

"We currently have an equivalent of about 22 days [supply]. We want to get to 42 days," he said.

Asked if this relatively low level left the country vulnerable in the event of an international oil crisis, he responded "Yes, it would."

The department was waiting for the local economy to pick up before it started upping the strategic stock level of crude oil.

In his briefing to the committee, Maqubela said South Africa's main oil supplier at the end of last year was Saudi Arabia.

"Nearly half (45%) comes from Saudi Arabia. A further 23% comes from Nigeria, 18% from Angola, 4% from Ghana, and the balance (10%) from other sources."

While Saudi Arabia was a stable supplier, "whenever there's tension in Nigeria, we get jittery", he said.

South Africa used to get oil from Iran, but these imports had ceased when Western nations imposed sanctions on that country.

Maqubela described South Africa's capacity to respond to a "liquid fuel emergency" as a key national challenge.

"Not necessarily a local emergency, but an international one that disrupts the flow of crude oil. This [the country's ability to respond] is an area we are going to be focusing on."

He also highlighted the rising demand for liquid fuels from neighbouring Botswana, Lesotho, Namibia, and Swaziland, which "we think will reach 200 000 barrels per day before 2020". With the exception of Namibia, these countries were wholly dependent on South Africa for their fuel.

A further problem was not all South Africa's refineries, located in Durban (two), Cape Town, Sasolburg, Secunda, and Mossel Bay were operating at maximum capacity.

"Not all refineries are operating at name-plate capacity. The average is 80%... hence the increase in imports that we are seeing."

There was also a need for a second crude import facility. Currently, the bulk of imported crude oil flowed into the country via a single buoy mooring in KwaZulu-Natal.

"It's very important we look at this... 80% of the crude we import comes in via one facility."

On the current system of pricing petrol and diesel, he said this worked well and needed little alteration.
"It is clear to us that the current pricing framework works... It is the best we can have... we can tweak it here and there, but should not tamper too much with it."

Tuesday's briefing comes a day before the price of petrol is set to drop by 67 cents a litre. The drop is due to a decrease in the international price of crude oil and subsequent adjustments to South Africa's basic fuel price.

Maqubela also spelled out government's views on self-service fuel pumps for motorists.

The sector employed as many as 70 000 people on the retail side, mainly filling station petrol and forecourt attendants who would lose their jobs should self-service pumps be introduced.

"In our view, this would not be acceptable," he said.

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