What Does Natref’s Force Majeure Mean For SA?
After Sasol’s Natref crude oil refinery temporarily halted operations amid oil supply delays in July, leaving all of South Africa’s domestic refining capacity offline, fears arose that the country might face a fuel shortage. However, Sasol has assured the public that this will not be the case. The company has confirmed that it has now received a shipment, meaning that Natref operations will now resume. Without Natref, Sasol’s synfuels operation is the only local fuel refinery left standing in the country. South Africa now imports more than 80% of its fuel.
Why Is the Fuel Price So High?
The price of fuel has increased dramatically over the past several months. The primary driving force behind this has been the war between Russia and Ukraine, which has forced the global oil price to increase significantly to more than $120 a barrel, although this has been showing signs of a decrease over the past few weeks. Adding to the high global oil price is South Africa’s weak exchange rate, which makes fuel cost even more locally. On top of that are several government-imposed levies, margins and taxes.
Are Fuel Prices Expected To Fall Soon?
Fuel prices are expected to fall in August, with the petrol price coming down by as much as R1.08 per litre and diesel reducing in price by about 94 c per litre. This is owed to international oil prices reducing to under $100 per barrel in early July.
However, the weakened rand will undermine the value this could provide to South Africans. Additionally, the Government’s complete withdrawal of its interventions ‒ which saw it reduce the fuel levy by R1.50 per litre in April, May and June, and then halved this to 75c in June ‒ will undermine the field price decrease.
Can Oil Be Recycled?
Oil recycling is entirely feasible if used oil generators work together with collectors and processors to make it happen. Used motor oils can be re-refined many times over, where soluble and insoluble impurities are removed, returning the oil back to a pristine state. It can then be put back into the supply chain as a top-quality lubricant. The alternative is that the used oil be used as fuel and burned. While this is the easier route, the burned oil does produce significant harmful emissions. The ROSE Foundation – Recycling Oil Saves The Environment – is a champion of recycled oil.
Look out for our next newsletter to stay informed and up to speed on the issues affecting the fuel industry.