Johannesburg – The direct impact of the US sanctions on Iran would be felt on fuel prices, although South Africa does not import oil from the Middle East state, the Department of Energy said on Thursday.
South Africa imports almost a quarter of its fuel, and the country ceased to receive oil from Iran in 2012.
“As far as the immediate impact of the US sanctions on Iran are concerned, the impact is going to be felt on the price of fuel,” said Tseliso Maqubela, Deputy DG for Petroleum and Petroleum Regulation.
"We are likely to see higher prices," he said.
Maqubela said there was a need to reduce the country’s over reliance on fuel imports, stating South Africa's plan of building a new fuel refinery or boosting the capacity of the existing facilities.
“South Africa has expressed the plan of building a new refinery, that plan is still on the cards,” said Maqubela at a media briefing to discuss the state of the energy sector.
He said South Africa needed to tap on the growing demand for fuel refinery on the continent, as countries like Angola and Nigeria were also looking at building their own facilities.
Imported crude oil is refined at South Africa's four refineries, Calref, which was owned by Chevron, Enref refinery and Sapref, a joint operation by Shell and BP. Energy giant Sasol and Total South Africa own Natref.
Maqubela said the growth in the demand of petroleum products in the country outstripped capacity.
During the briefing, Minister of Energy Jeff Radebe, emphasised the importance of constant and reliable energy supply as a component of improving economic growth.
“As part of bringing certainty to the energy sector, I also intend to ensure that we stabilise governance issues at our State Owned Entities,” said Radebe.
Radebe who became energy minister in February, said he planned to take the Integrated Rresource Plan (IRP) back to cabinet by mid-August. The plan outlines projections for different energy projects, including the nuclear programme. Cabinet in December sent the document back for further consultations.
He said consultations on the IRP would include input from various stakeholders including Nedlac.
Radebe could not clearly provide answers on the state of the country’s controversial nuclear programme.* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.