After the refineries: how South Africa’s fuel business makes money going into 2027
South Africa now imports more than half its fuel, runs two refineries, and loses its Mozambican gas supply after 2028. This is the sector as it stands going into 2027: who the players are, where margin and exposure sit, who regulates and who else can stop you, and the two supply questions every board will face. Part one of three.
How does the oil and gas industry work in South Africa in 2027?
The country has gone from refining most of what it burns to importing more than half of it, in under five years. Gas supply from Mozambique falls away after 2028. The upstream regulatory map was redrawn in 2024. Many risk registers still describe the sector as it was before these changes.
Security of supply
More than50%of daily fuel demand is now met by imports1PetroSA, Enref and Sapref have all stopped refining since 2020. Natref has been offline since a fire in early 2025. Operational capacity is about 250,000 barrels a day against an installed 720,000.1
Gas
After2028Pande-Temane gas supply from Mozambique is expected to fall away2Industries that depend on that gas directly employ 70,000 to 100,000 people. Neither LNG import terminal is yet operational.2
Regulation
Signed2024Upstream Petroleum Resources Development Act 23 of 20243A 20% state carried interest and a minimum 10% black-owned participating interest in every petroleum right. Commencement date still to be proclaimed.3
Refineries in South Africa: the value chain has moved downstream
South Africa has never produced crude in volume. The sector is a logistics and refining business sitting on top of imported crude and, increasingly, imported finished product. That changed shape between 2020 and 2022: PetroSA's Mossel Bay plant closed in 2020, Enref in Durban became an import terminal after the 2020 fire, and Sapref shut after the 2022 floods and was later sold to the Central Energy Fund.1
Two plants are running: Astron Energy in Cape Town and Sasol's coal-to-liquids complex at Secunda, the only one not dependent on imported crude. Natref in Sasolburg has been offline since a fire in early 2025.1 Everything else is now a question of ships, terminals, tanks and the Transnet pipeline.
The cost of that shift is already measurable. Refining capacity has halved in a decade, petroleum-related manufacturing output is down roughly 20% since 2019, and about 5,400 direct and indirect jobs went with the closures, most of them skilled. The country is also now wholly import-dependent for bitumen since Natref stopped producing it in September 2025: it ranked 123rd among bitumen importers in 2019 and 20th today.1
The risk profile has shifted with it. Refinery operational risk has largely left the country. Terminal capacity, demurrage, port congestion at Durban, pipeline tariffs and foreign exchange exposure have taken its place, and many registers in the industry have not caught up.
How the money is made now
The petrol price is a regulated stack, so nobody in the chain sets it; diesel is regulated at wholesale and free at the pump. Each segment earns a defined slice, and since 2022 the slices have moved. Who earns what, and who gained or lost when the refineries closed:
| Segment | How it earns | Since the closures |
|---|---|---|
| Importers and traders | The gap between landed cost of a cargo and the import-parity Basic Fuel Price, plus timing. This is the margin that used to belong to the refineries.4 | Gained. Over half of demand is now a cargo someone traded.1 Vitol, Glencore, Gunvor and ADNOC are in the market for this reason. |
| Terminals and storage | Throughput and rental fees per litre or per tank, paid whether the oil price rises or falls. | Gained most. Enref became a terminal; TNPA is signing 25-year terminal concessions; the state is bidding for storage. Arguably the most defensible position in the chain.1,13 |
| Pipeline | A NERSA-approved tariff on every litre moved from Durban to the interior, set on an allowed-revenue basis. | Gained. More imported product through Durban means more litres on the line. The tariff is a major logistics cost for any inland wholesaler. |
| Refiners | The difference between crude plus processing cost and the BFP, the "crack". In South Africa this has to fund Clean Fuels 2 as well, a deadline that moved from 2017 to 2023 to 2027 with no cost-recovery mechanism agreed, which is why most refiners chose not to invest.1 | Lost. Three of five refineries gone; Natref offline. Astron is spending up to R6 billion to stay in.1 |
| Sasol Secunda | A refining margin on coal, not crude: the only producer whose feedstock cost is not set by Brent and the rand. | Exposed differently. Its selling price still tracks import parity; its cost base does not. Exposed instead to carbon tax and the loss of Mozambican gas.2,5 |
| Wholesalers | The regulated wholesale margin, about 67 cents a litre, plus or minus what the slate mechanism gives or takes between price adjustments.4 | Squeezed. Margin is fixed; FX, freight and demurrage exposure between cargo and adjustment is not. |
| Retailers | The regulated retail margin, about R3.15 a litre, and the forecourt shop, which is where the real return sits.4 | Held. Volume is flat, but the shop is why ADNOC paid R16 billion for 580 sites.7 |
One consequence most boards miss: because the pump price is benchmarked to import parity, the refinery closures had no first-round effect on fuel inflation. The cost landed on the trade account, on jobs, and on the operators now carrying the import logistics instead. The Reserve Bank also notes that the BFP's reference markets and cost allowances were calibrated more than a decade ago and no longer match current import routes, so the gap between what an importer actually pays and what the formula allows is itself a risk line.1
Three consequences for risk follow. First, FX and freight moves hit the slate immediately and operators carry the gap until the next price adjustment. Second, the business is a working-capital business; one late cargo or one stalled pipeline batch ties up hundreds of millions of rand. Third, because margins are fixed, the losses that matter come from control failures: product quality, metering, theft from the pipeline, and licence non-compliance that results in a stop order.
Who regulates what
Few sectors answer to as many regulators at as many points of the chain. An obligations register for a mid-sized wholesaler commonly runs to well over a hundred lines once sector, environmental, tax and general corporate law are combined. The most common gap observed is an obligation that two people each think the other one owns.
| Regulator | Upstream | Import and refining | Pipeline and storage | Wholesale | Retail |
|---|---|---|---|---|---|
| Department of Mineral Resources and Energy (DMRE)Petroleum Products Act licences for wholesale, retail and manufacturing, site licensing and the Basic Fuel Price. | |||||
| Petroleum Agency SAUpstream rights under the UPRD Act 23 of 2024, once proclaimed. | |||||
| National Energy Regulator (NERSA)Pipeline and gas tariffs, Gas Act licensing and Transnet pipeline tariff decisions. | |||||
| South African Revenue Service (SARS)Fuel levy, customs on imports and carbon tax at R308 per tonne from 1 January 2026. | |||||
| DFFE, provincial environment departments and metrosNEMA environmental authorisations for terminals and depots, national or provincial, such as KZN EDTEA. Atmospheric emission licences from the metro or district. Waste licences and spill response under NEMA s30. | |||||
| Competition CommissionPrice signalling, wholesale and retail conduct, and historic cases against the majors. | |||||
| Transnet National Ports AuthorityBerth allocation, port tariffs and demurrage. | |||||
| Central Energy Fund and Strategic Fuel Fund (CEF, SFF)Strategic stock policy and state trading. | |||||
| Regulators | 2 | 4 | 3 | 4 | 3 |
- Petroleum Products Act 120 of 1977 · licences, pricing, site and retail
- Petroleum Pipelines Act 60 of 2003 and Petroleum Pipelines Levies Act · pipeline licensing and tariffs
- Gas Act 48 of 2001 · gas transmission, storage, trading licences
- National Energy Regulator Act 40 of 2004 · NERSA's mandate
- National Energy Act 34 of 2008 · energy planning, data, security of supply
- Mineral and Petroleum Resources Development Act 28 of 2002 · upstream, until the UPRD Act is proclaimed
- Upstream Petroleum Resources Development Act 23 of 2024 · upstream, once proclaimed3
- Central Energy Fund Act 38 of 1977 and the SANPC Bill · the state's petroleum vehicles10
- NEMA 107 of 1998, Hazardous Substances Act, OHS Act · environment and safety
- Carbon Tax Act 15 of 2019, Customs and Excise Act · levies and duties5
- Companies Act, PFMA (state entities), B-BBEE Act, POPIA, PRECCA · corporate
- Integrated Resource Plan 2025 · 6,000 MW gas-to-power by 203012
- Integrated Energy Plan · draft; the cross-sector energy plan
- Gas Master Plan · draft; LNG import sites and gas infrastructure2
- Liquid Fuels Master Plan · draft; refining, imports, stockholding
- Strategic Petroleum Stocks Policy · draft9,20
- Energy Security Master Plan 2007 · the standing supply-security framework
- Biofuels blending regulations 2012 · mandatory blending, not yet enforced
- Operation Phakisa, oceans economy · since 2014, with a stated aim of 30 offshore wells in ten years
- National Development Plan 2030 · refinery upgrade or new build as a stated objective
Four of these instruments are still drafts. A register built on them has to carry a line for the policy itself changing.
Beyond the regulators: who else can stop you
A regulator can refuse a licence. The stakeholders below can do something slower and harder to manage: withhold approval, withhold funding, withhold labour or withhold public goodwill. A petroleum business has a long list of them. The register only needs the dozen that can stop it trading, and registers in the industry commonly name fewer than five, usually the regulators alone.
The approval chain
For a state-owned operator, the Department, National Treasury under section 54 of the PFMA, and the portfolio committee each hold a veto on structure, transactions and funding.11 For a private one, the Competition Commission and the licensing authorities hold the equivalent. Treat each as a risk owner.
Labour
Unions in the sector can mobilise and litigate. Any restructuring, site closure or merger that does not have labour engaged early becomes a legal timeline instead of a business one.
Funders and partners
Lenders, joint-venture partners and the industry bodies (SAPIA, SAOGA) set the terms on which new projects are financed and licensed. Legacy debt in a state entity is a known constraint on the whole group's investment case.9
Customers and the public
Large customers and the media have low formal influence and high reputational influence. A supply failure becomes a public story in hours; the register should say who speaks and what has been pre-approved to say.
The ten risks this landscape produces
The state's own petroleum group names oil price volatility and geopolitical conflict, cyber threats, climate events, underutilised assets and merger integration among its principal risks for 2024/25.9 When the same exercise is run for an operator or a large consumer, ten risks recur. They are listed here; the second guide in this series rates each one, explains it and gives the ten-question self-check.
- 1Supply interruption at port
- 2Foreign exchange, slate and working capital
- 3Gas feedstock decline
- 4Licence non-compliance and stop orders
- 5Pipeline theft and product loss
- 6Environmental, safety and insurability
- 7Carbon tax escalation
- 8Single-supplier dependency
- 9Cyber and operational technology
- 10Long-term demand and policy shift
Gas supply falls away after 2028, and the decision is due now
Natural gas from the Pande and Temane fields in Mozambique is expected to fall away after 2028 as the fields deplete. Sasol takes roughly 35 to 40% for Secunda and the same again for Sasolburg; the balance, about 20 to 23 petajoules a year, goes to industrial customers in steel, sugar, paper and pulp, glass and motor manufacturing. Those industries directly employ 70,000 to 100,000 people.2
The Rompco line itself is 865 km, owned by iGas (40%), Mozambique's CMG (40%) and Sasol (20%), and has supplied Sasol and about 300 large industrial users since 2004. Demand runs at roughly 185 PJ a year; industrial users pay $7 to $8 per MBtu today and the sector's own estimate is a 40 to 50% increase once supply is imported.9,12
The alternative is LNG, and each of the main options is behind schedule. At Richards Bay, the Vopak and Transnet terminal's investment decision is on hold after the Supreme Court of Appeal halted Eskom's 3,000 MW gas plant in September 2025. At Ngqura, Transnet signed a 25-year, R22 billion terminal agreement with Ukwanda LNG in May 2026, with full operation targeted for 2035. In Durban, a Vitol-backed consortium with Vivo Energy and Engen is planning a $3 billion LNG-to-power project. Matola in Mozambique has its approvals and Rompco is exploring a connection.2,12,13 The CEF group's own plans at Saldanha and Komatipoort are earlier still,9 and the state has signalled that it sees its role in gas as building transmission and import infrastructure, with new pipeline capacity into the southern Cape under discussion, rather than owning molecules. The IRP 2025 calls for 6,000 MW of new gas-to-power by 2030; none of the gas to run it has a signed route into the country yet.12 The practical risk for an industrial user is price. Gas stays available at LNG landed cost, while the cost base was built on a legacy contract.
Registers in the industry commonly carry this as a single line, rated medium, owned by procurement. It belongs at the top of the register, owned by the CFO, with a scenario attached: what does the plant look like at 2x gas cost, and what is the decision point for conversion to an alternative fuel.
Fuel shortage risk: import dependency has made stockholding a board matter
South Africa has no legislated minimum commercial stock requirement. Strategic stocks held at Saldanha are crude, not finished product, and the 2015 sale of part of them was reversed by the Western Cape High Court in 2020.16 The draft Strategic Petroleum Stocks Policy published for comment in 2026 would change that: a mandatory 21-day buffer for licensed wholesalers, manufacturers and importers, held 70% crude and 30% refined, replenished within 45 days, with state stocks managed by SANPC and a long-term target of up to 90 days.20 Until it is enacted, the country runs on commercial inventory and a steady cadence of cargoes, and the cover is uneven: on 2025 DMRE and NERSA data, diesel storage covers about 71 days of demand in KwaZulu-Natal, 34 in the Eastern Cape, 24 in the Western and Northern Cape and 19 inland, where most of the diesel is burned.19
For an operator, the board should ask how many days of cover do we hold at each depot, what is the trigger for drawing on it, and what happens on day eleven. Few can answer the third part.
For an industrial consumer, the equivalent question is how many days of diesel are on site for generators and fleet, and whether the supplier's force majeure clause has ever been read.
| Region | Supplied by | What the sector's own forecasts show to 2040 |
|---|---|---|
| Western Cape | Astron's Cape Town refinery plus imports through Cape Town and Saldanha. | Diesel short and staying short. Petrol moves to surplus as hybrids and EVs take share. |
| Southern Cape | Imports over the Mossel Bay single buoy mooring into the state's Voorbaai tanks; Eskom's Gourikwa gas turbines sit next door. | Diesel short, with the power station a large and lumpy customer. |
| Eastern Cape | Road and coastal supply from the Southern Cape and Port Elizabeth; the Ngqura LNG terminal is the long-term gas route.13 | The most severe diesel deficit on the west-coast side; petrol flattens. |
| KwaZulu-Natal | Durban imports since Sapref and Enref stopped refining; the SANPC Refinery site is the main candidate for restored capacity.1,9 | Diesel and jet short, with the port and the pipeline head as the single points of failure. |
| Inland | The Transnet multi-product pipeline from Durban, Natref when running, and Secunda.1 | The thinnest diesel cover in the country, about 19 days on 2025 data, and the largest deficit; petrol roughly flat.19 |
Two things follow for a register. Supply risk concentrates in diesel, and it concentrates inland. The petrol side carries the opposite risk: a slow decline in demand that leaves retail and storage assets sized for a market that is shrinking, which is risk 10 in the next guide.
What good looks like, and what the board should ask
Three of the ten, by way of preview. A minimum cover set per depot with a trigger that starts a defined response, reviewed weekly at exco. Every licence condition in one register with an owner and a renewal date, attested quarterly. And the business modelled at twice today's gas cost, with a decision date for the alternative.
The third guide in this series covers all ten: the control that moves the rating, the gap most commonly observed, and the five questions a board should be able to answer in a sentence each.
Top risks agreed in 5 days
Giving an oil and gas operator a clear view of its top risks
- Manguzvane, Mnguni, Mofokeng and Nesengani, Running on empty? South Africa's refinery closures and their macroeconomic impact, South African Reserve Bank, Occasional Bulletin of Economic Notes OBEN 2601, March 2026. Import share, installed and operational capacity, closure dates, R76 billion avoidable import bill.
- Wits University / TIPS, A sharp fall in gas supplies in 2028 threatens SA's economy, July 2026. Decline timing, Sasol allocations, IGUA employment estimate, LNG terminal status.
- Cliffe Dekker Hofmeyr, The President signs the Upstream Petroleum Resources Development Act, 1 November 2024. Act 23 of 2024, assent 25 October 2024, 20% state carried interest, 10% minimum black participation, commencement by proclamation.
- Department of Mineral Resources and Energy fuel price structure, 2026, as reported by TopAuto. Component values for inland 95 petrol; shares calculated and rounded by KeyDimension.
- Anthesis, South African carbon tax update: 2026 Budget highlights. R308 per tonne from 1 January 2026, Phase 2 to 2030.
- Freight News, OR Tambo fuel drought due to KZN floods, 26 April 2022. Jet fuel stock at about three days of demand against a normal seven.
- Bizcommunity, UAE oil company agrees to R16bn deal to buy Shell's SA fuel stations, 7 July 2026. Buyer, deal value, 580 sites, closing expected 2027, 28% empowerment stake.
- Engineering News, New national petroleum company aims to boost energy, fuel supply security, 14 May 2025. SANPC formation from PetroSA, SFF and iGas under the CEF.
- Central Energy Fund SOC Ltd, CEF Group Integrated Annual Report 2024/25, approved 30 September 2025. Group structure, SANPC Refinery acquisition and feasibility study, Rompco ownership, Saldanha and Coega LNG and Komatipoort projects, draft strategic stocks policy, principal risks.
- Cliffe Dekker Hofmeyr, Key changes in the 2026 SANPC Bill, 17 June 2026, and African Energy Chamber, SANPC enters stabilisation phase, targets full operations by 2027, November 2025. Bill B2-2026 introduced 11 February 2026; mandate, asset transfer, staff numbers, operational timeline.
- Stakeholder map: the power-interest grid after Mendelow (1991); King V Report on Corporate Governance (stakeholder relationships); Public Finance Management Act 1 of 1999, section 54 (Treasury approval of significant transactions by public entities). Placement of bodies on the grid is KeyDimension's assessment.
- Engineering News, More intentional effort and coordination needed to avert gas crisis, 10 April 2026. Rompco customer base, 185 PJ demand, industrial gas prices, Richards Bay and Durban LNG status, IRP 2025 gas targets.
- Green Building Africa, TNPA and Ukwanda LNG sign R22 billion Port of Ngqura gas terminal agreement, 31 May 2026. Term, value, 3,000 MW allocation, 2035 target.
- Vivo Energy, Engen and Vivo Energy combination completed, 21 May 2024. Petronas 74% stake sold, Phembani 21% of the South African business.
- Reuters via TankTerminals, Trafigura among three bidders for minority stake in Natref, 6 May 2026. 36.36% stake, 108,500 b/d, bidders.
- Parliament of South Africa, Committee chairperson welcomes court judgement in favour of CEF and SFF, 20 November 2020. Reversal of the 2015 strategic crude sale.
- Engineering News, Diesel disruptions and early hikes point to possible gap in pricing framework, 25 March 2026. No physical shortage, contract pricing above reference, R9.81 under-recovery, diesel pricing review.
- Bizcommunity (Reuters), South Africa EV sales this year race past last year's total, 3 November 2026, citing naamsa. NEV sales and share.
- Africa International Advisors, Storage as security: rethinking South Africa's liquid fuels resilience, 30 March 2026, citing DMRE and NERSA 2025 data. Storage and days of cover by region and product.
- Daily Maverick, We do the maths on Mantashe's new plan to secure South Africa's fuel, 16 July 2026. Draft Strategic Petroleum Stocks Policy 2026: 21-day private obligation, 70/30 split, replenishment deadlines, SANPC role.
- South African National Energy Association, South African Energy Risk Report 2024-25 Summary. Industry risk list: energy security, grid, policy, affordability; gas window closing.
Risk ratings, "what good looks like" and the board questions are KeyDimension's own, based on industry observation. Figures are rounded and were current at the date of publication.
This guide is general commentary and not advice on any specific organisation. Figures are rounded and sourced as noted.