Crucial that SA's operating refineries maintained to ensure energy security, says Sasol CEO

How secure is South Africa's energy system?

That's the pertinent question Sasol CEO Simon Baloyi asks as fuel shortages threaten, supply chains tighten and price shocks ripple through the economy amid the ongoing Middle East crisis.

In an opinion piece published on News24, Baloyi argues that today's energy security debate is often framed too narrowly, with energy security and decarbonisation treated as competing priorities.

He notes that, for decades, the chemicals and energy company's synthetics fuels operations have given South Africa a capability to produce liquid fuels domestically, with reduced reliance on imported crude oil.

While the country currently imports most of its crude oil and refined fuels. Sasol's coal-to-liquids operations in Secunda and its integrated fuels value chain in Sasolburg supply approximately 30% of national demand for petrol, diesel and jet fuel.

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The economics of this contribution help cushion the economy against fuel supply disruptions beyond our borders, Baloyi points out.

"The strategic value of locally produced fuels is measured not only in volumes produced. It also lies in enduring capability: long-life infrastructure, specialised skills and operating systems refined over decades. These assets cannot be replicated quickly or cheaply."

In conversation with Stephen Grootes, Baloyi says it is crucial to make sure that the operating refineries we have which number three at present, are looked after and their life extended.

"Astron refinery in Cape Town delivers about 100,000 barrels a day, and the Sasol Natref (National Petroleum Refiners of SA) operation is about the same size. The Secunda refinery produces 140,000 barrels a day.

Sasol currently supplies approximately 30% of South Africa’s domestic fuels market through their Secunda operations and the Natref refinery.

Baloyi highlights the importance of the Secunda refinery, because it does not rely on crude oil but runs on coal and gas.

"Those are resources we have ourselves and the facility prodcues not only petrol and diesel but crucial chemicals like ammonia, used for example for fertilisers."

Security of supply, therefore, relates to both energy (particularly fuel) and chemicals, he emphasizes.

Championing energy security is not about resisting change, Baloyi says, but about ensuring change strengthens rather than weakens the foundations of the economy.

"Economic recovery, competitiveness, job creation and climate commitments all depend on reliable, affordable energy."

"In a period of uncertainty, getting this balance right may prove to be one of South Africa's most underappreciated strategic advantages."

Scroll up to the audio player to listen to the interview, and click here to read the Sasol CEO's opinion piece