Due for an oil change: South Africa's downstream oil sector Report

Insight 12 August 2013

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Report summary

South Africa, the largest economy on the African continent, has a growing demand for oil that has outgrown its capacity to adequately supply its own needs. As the fuel deficit grows, there will be more reliance on imports in order to satisfy domestic demand - a trend which is increasingly detrimental to national fuel supply security. Oil demand growth is supporting an expanding network of retail service stations, mostly under the brands of the oil majors, all of which also have a refining...

A highly regulated oil market in a dangerously deficit position
Economic development will support rising vehicle ownership, increasing fuel demand
An ageing domestic refining portfolio that is unable to satisfy a large energy appetite
A highly regulated oil market, with new biofuel and stockholding laws imminent
- Fuel quality
- Strategic stocks
A large and growing oil product deficit, highly exposed to global external shocks
An efficient, growing retail network, consisting largely of majors' brands
A regulated, complex fuel pricing structure, highly dependent on external market forces
Fuel margins are fixed, increasing emphasis on non-fuel revenue to add value
- Retail margins
Companies: refinery upgrades, storage expansion, more non-fuel partnerships expected
Outlook