SA fears shortages, even higher fuel prices amid warnings over supply

Concerns about rising fuel prices are growing in South Africa as industry leaders warn that supply disruptions could push costs even higher.

The warning comes amid uncertainty around global oil flows, with the price of crude oil already spiking. Higher oil prices typically translate into higher fuel prices for South African motorists.

Peter Morgan, CEO of the Liquid Fuel Wholesalers Association, said the situation is creating anxiety in the fuel industry.

“It's all about the fact that the crude oil is not getting through the straits at the moment, therefore the price is spiking terribly,” he said.

South Africa’s fuel industry is regulated, which affects how price increases filter through to consumers.

But Morgan warned the country should already be preparing for potential disruptions.

Lack of planning raises concern

Morgan said there should already be contingency planning between industry and government.

“One of our concerns is that we don't appear to be in crisis mode,” he said.

He added that discussions with the relevant government department should have started weeks earlier when the risk first emerged.

According to Morgan, a clear national plan is needed to manage supply risks and rising fuel prices.

“We should have a contingency plan. We should have been talking about this three weeks ago when the possibility came about.”

Import dependence adds pressure

South Africa now imports most of its fuel as finished products after several refineries shut down.

Morgan said this makes the country more vulnerable to global disruptions and price spikes.

He warned that even if crude oil is stored locally, it may not help if refineries are not operating.

“For example, if you've got crude oil in Saldanha at the moment that has a pipeline into the Cape Town refinery, it's really not strategic stock because that refinery is actually on a shutdown this month,” he said.

Calls for a national fuel supply dashboard

Morgan said South Africa needs a coordinated system to monitor fuel stocks and demand.

Without clear oversight, rising fuel prices and supply uncertainty could trigger panic in the market.

“We should have a dashboard so when it hits the fan, we can turn it on,” he said.

He said industry and government should know exactly how much fuel is available, how much is being consumed and what steps to take if shortages or price shocks occur.

Until such systems are in place, Morgan warned, the country risks repeated moments of uncertainty as fuel prices climb and supply concerns grow.

For more information, listen to Morgan on 702’s Drive with John Perlman using the audio player below: