What South African fuel boards must have on the register before 2027
South Africa imports more than half its fuel, runs two refineries and loses its Mozambican gas after 2028. As boards finalise 2027 registers and budgets, these are the ten strategic risks that belong on them: what each one is, why it is there now, where the obligation comes from, how to see it coming, and who should own it. Part two of three.
What are the biggest risks facing oil and gas companies in South Africa in 2027?
Strategic registers in this sector commonly run to forty or fifty lines, written by the risk function for the risk function. The board reads the first page. This guide sets out the ten that belong on the strategic register, rated at a typical inherent position before treatment, with the facts behind each one so the rating can be defended in the room.
Supply
More than50%of daily fuel demand is imported, and two refineries are running1Every inland litre now depends on a cargo, a berth and a pipeline batch.
Gas
After2028Mozambican supply falls away; no LNG terminal is yet operational2,12About 300 industrial users on the pipeline, and the earliest full-scale terminal is targeted for 2035.12,13
Compliance
From 2026R308per tonne carbon tax, up 31%, rising to 20305Alongside a new upstream Act, a new national petroleum company and a BFP formula the Reserve Bank calls a decade out of date.1,3,10
Why ten, and how we rate them
A strategic risk register is the list the board owns: the ten things that could stop the strategy, each with a named owner at executive level, a rating the board has agreed, and a treatment plan with a date. The operational register sits beneath it and can run to hundreds of lines. The compliance universe sits beside it.
Ten is a practical number. A board can hold it in one sitting and an audit committee will read it in full. When a register grows past that, the real risks hide among the routine ones.
The ratings below use a five-by-five likelihood and impact scale in line with ISO 31000, and show the inherent position, before controls. An inherent view tells the board what it is exposed to; the residual view, after controls, is the next conversation and depends on evidence the assessment gathers. The positions are typical for the sector; any one organisation's will differ, which is the point of doing the exercise.
The oil and gas risk register: the top 10 risks
Ten entries. Each gives the risk, why it is on the register now, the source of the obligation or exposure, the early warnings a board should ask to see, and who typically owns it.
Supply interruption at port
Inherent 20 · L4 I5The risk. A cargo misses its window at Durban, Cape Town, Mossel Bay or Richards Bay, through berth congestion, weather, port equipment failure or a late vessel, and inland depots draw down with no replacement scheduled.
Why now. With imports supplying more than half of demand and operational refining at about 250,000 barrels a day, the buffer that domestic refineries used to provide is gone.1 The April 2022 floods are the benchmark: two weeks after them, jet fuel stock at OR Tambo was down to about three days of demand and airlines were cutting loads.6 Diesel is the product to watch: in March 2026, with no physical shortage in the country, contract buyers were quoted well above the reference price, forecourts ran short on pre-buying, and the under-recovery reached R9.81 a litre.17 On 2025 data, diesel storage covers about 19 days of demand inland against 71 in KwaZulu-Natal, so the exposure sits at the far end of the pipeline.19 The draft Strategic Petroleum Stocks Policy of 2026 would make a 21-day buffer mandatory for licensed wholesalers and importers, which turns days of cover from a management metric into a licence condition.20
Obligation and exposure. Petroleum Products Act licence conditions on supply; the draft Strategic Petroleum Stocks Policy once enacted;20 customer contracts; Transnet National Ports Authority berth allocation and demurrage.
Foreign exchange, slate and working capital
Inherent 20 · L5 I4The risk. The rand or freight rates move between the date a cargo is priced and the date the Basic Fuel Price adjusts, and the operator carries the gap on the slate until it unwinds. Beneath it sits the plainer risk: the business cannot fund thirty days of product, a late cargo or a slow debtor, and liquidity becomes the constraint.
Why now. About half the inland petrol price is the BFP, an import-parity formula recalculated monthly.4 The Reserve Bank notes the formula'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 pays and what the formula allows is itself structural.1 Wholesale margin is about 67 cents a litre; the exposure between adjustments is not capped.4 Diesel adds a twist: only petrol is fully regulated, diesel has a monthly reference price and free pricing at the pump, and the March 2026 mid-month increases prompted the regulator to say the diesel mechanism needs review.17
Obligation and exposure. DMRE Basic Fuel Price and slate mechanism; hedging policy approved by the board; covenants with lenders on working capital.
Gas feedstock decline
Inherent 25 · L5 I5The risk. Natural gas from Mozambique's Pande and Temane fields falls away after 2028, and the organisation's cost base, plant or product depends on it.
Why now. Sasol takes roughly 35 to 40% for Secunda and the same again for Sasolburg; the balance supplies about 300 industrial users through the Rompco line. Demand runs at roughly 185 PJ a year; industrial users pay $7 to $8 per MBtu and the sector's own estimate is a 40 to 50% increase once supply is imported.2,12 No LNG terminal is operational. Richards Bay is on hold after the Supreme Court of Appeal halted Eskom's gas plant in September 2025; Ngqura's R22 billion terminal is targeted for full operation in 2035.12,13
Obligation and exposure. Gas Act and NERSA licensing; gas supply agreements and their force majeure clauses. The power sector is the other claimant: coal decommissioning accelerates after 2030 and the IRP 2025 calls for 6,000 MW of gas-to-power by 2030, so an industrial user will be bidding against Eskom and the independent producers for the same imported molecules.12
Licence non-compliance and stop orders
Inherent 20 · L5 I4The risk. A wholesale, site, manufacturing or upstream licence carries conditions nobody tracks, a renewal date passes, or an ownership condition is breached, and the regulator issues a stop order or declines renewal.
Why now. The Upstream Petroleum Resources Development Act 23 of 2024 introduces a 20% state carried interest and a minimum 10% black-owned participating interest in every petroleum right, with commencement still to be proclaimed.3 Downstream, the Shell sale to ADNOC and the Engen sale to Vivo both carry empowerment conditions.7,14 For anyone still refining, Clean Fuels 2 compliance by 2027 is a condition of continuing to operate, with an upgrade path of several years, so a plant that has not started cannot restart compliant before about 2030.1 An obligations register for a mid-sized wholesaler commonly runs to well over a hundred lines; the most common gap is an obligation that two people each think the other one owns.
Obligation and exposure. Petroleum Products Act licences and conditions; UPRD Act once proclaimed; Competition Commission conditions on transactions; B-BBEE commitments.
Pipeline theft and product loss
Inherent 15 · L5 I3The risk. Product is lost to tapping on the Transnet multi-product pipeline, to depot losses above metering tolerance, or to misdeclaration, and the loss is absorbed into cost of sales without being seen.
Why now. More imported product through Durban means more litres on the line and in tanks. The pipeline is designated critical infrastructure, and losses carry both a financial and a security dimension.
Obligation and exposure. Critical Infrastructure Protection Act; metering and custody-transfer standards in supply agreements; insurance conditions.
Environmental, safety and insurability
Inherent 16 · L4 I4The risk. A terminal spill, tank-farm contamination, a serious injury or an air emissions licence breach, with clean-up cost, licence consequences and personal liability for directors. And the quieter version: insurers decline or price out property, environmental or directors' cover on an ageing site, and the business is carrying the exposure itself without the board knowing.
Why now. The sector's asset base is older and more concentrated in terminals than it was. Sapref's closure after the 2022 floods involved environmental contamination that made repair costly.1 Authorisations sit at three levels: national or provincial under NEMA, atmospheric emission licences at the metro or district, and waste licences.
Obligation and exposure. NEMA, including the section 28 duty of care and section 30 incident reporting; atmospheric emission licences; waste licences; director liability under NEMA section 34; the Occupational Health and Safety Act and Major Hazard Installation regulations; insurer risk-engineering survey conditions.
Carbon tax escalation
Inherent 16 · L5 I3 to 4The risk. Phase 2 of the carbon tax changes the economics of coal-to-liquids, refining and large combustion, and the change is treated as a tax line rather than a strategic cost.
Why now. The rate is R308 per tonne from 1 January 2026, a 31% increase and the largest since the tax began, with Phase 2 running to 2030.5 Secunda is exposed on the cost side in a way no import-parity operator is.1
Obligation and exposure. Carbon Tax Act; SARS environmental levy accounts; the Climate Change Act's sectoral targets as they are set.
Single-supplier dependency
Inherent 20 · L4 I5The risk. One terminal operator, one pipeline, one rail route or one supplier is the only way product reaches a site or a customer, and there is no documented, permitted, tested alternative.
Why now. Terminal ownership is concentrating: Enref became a terminal, TNPA is signing 25-year concessions, and the state is consolidating storage into one company.1,9,13 For inland customers, the Transnet pipeline is the route.
Obligation and exposure. King V on risk governance; customer contract service levels; force majeure terms in supply agreements.
Cyber and operational technology
Inherent 20 · L4 I5The risk. Terminal automation, metering and pipeline control systems sit on networks that were never designed to be attacked. A breach can stop product moving.
Why now. More of the chain is automated terminal and pipeline infrastructure than refinery process, and operational technology is typically owned by engineering, not security. The state's own petroleum group names cyber threats among its principal risks.9
Obligation and exposure. Critical Infrastructure Protection Act; POPIA for customer and employee data; King V on technology and information governance; insurance conditions on OT.
Long-term demand and policy shift
Inherent 10 · L2 I5, risingThe risk. The regulated price mechanism, fleet electrification or the carbon trajectory changes the lifetime value of terminals, sites and refining assets, and the strategy assumes today's structure indefinitely.
Why now. The Reserve Bank has put the BFP's calibration on the record as out of date.1 A new state petroleum company with a mandate across the chain is being legislated.10 Two of the six majors have changed hands since 2024 and a third is mid-sale, which says how the owners of capital see the next decade.7,14 On the demand side, new-energy vehicles were one in nine new vehicles sold in September 2026, 22,389 in nine months and up 34% on the whole of 2025, most of them hybrids that cut petrol consumption without showing up in EV counts.18 The asset-sizing risk on petrol starts before the pump volumes show it.
Obligation and exposure. DMRE fuel price review; the SANPC Bill; Climate Change Act; King V on strategy and risk.
Oil and gas risk assessment: the heat map
Six of the ten sit in the darkest band before controls. That is normal for a sector that has restructured this fast. The purpose of the map is to force three questions at the board: which of these do we own, what is our residual position after the controls we actually have, and which treatment moves a risk the furthest for the least money.
With the controls in guide 3 evidenced, the residual map typically moves risks 1, 4, 5 and 6 into the middle band. Risks 2, 3 and 8 stay in the darkest band until a structural decision is made: a hedging policy, a gas alternative, a second route. Risk 10 is the one that moves the other way, rising each year it is not discussed.
Risks against strategic objectives
Every register entry should tie to an objective. The table shows which of the ten threaten which of the objectives most fuel businesses carry. Dark dot: direct. Light dot: indirect.
| Risk | Revenue and volume | Margin and cash | Licence to operate | Continuity | Asset value |
|---|---|---|---|---|---|
| 1 Port supply interruption | |||||
| 2 FX, slate and working capital | |||||
| 3 Gas feedstock decline | |||||
| 4 Licence non-compliance | |||||
| 5 Product loss | |||||
| 6 Environmental, safety, insurability | |||||
| 7 Carbon tax | |||||
| 8 Single-supplier dependency | |||||
| 9 Cyber and OT | |||||
| 10 Demand and policy shift |
One register, not two
Four of the ten are compliance risks in disguise: licences, environmental authorisations, carbon tax, and the conditions attached to ownership. In most organisations they live in a separate compliance universe, maintained by a different person, reviewed by a different committee. The board then sees the risk without the obligation behind it, and the compliance officer sees the obligation without the rating.
The fix is structural. Each strategic risk points to the obligations that give rise to it; each obligation points back to the risk it feeds. One register, one owner per line, one report. It is the single change that most improves what an audit committee sees, and it is the reason the first thing we build in an engagement is the obligations register, before any risk is rated.
Ten-question oil and gas risk self-check
One per risk. Tick the ones you can answer yes to with evidence.
What comes next
A rated register is the starting point. The third guide in this series takes each of the ten and sets out 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. Ratings are typical and illustrative. Figures are rounded and sourced as noted.