The proposal, unveiled by the Department of Mineral Resources and Energy (DMRE) in a draft Strategic Petroleum Stocks Policy released for public consultation, seeks to increase the country's emergency petroleum reserves to approximately 36 million barrels—the first significant expansion of its strategic stockpile in more than five decades.
The move comes amid heightened concerns over global energy security following recent geopolitical tensions involving Iran and the United States, which disrupted international oil markets and drove up crude prices.
Shielding the Economy From Global Supply Shocks
South Africa says the proposed policy is designed to reduce the country's vulnerability to volatile global oil markets and geopolitical crises.
As one of Africa's largest fuel consumers and a net importer of crude oil and refined petroleum products, the country remains heavily exposed to disruptions in international supply chains.
The draft policy states:
"As a net importer of crude oil and increasingly refined products, the country remains vulnerable to international supply chain disruptions, price volatility, and geopolitical shifts. This Strategic Petroleum Stocks Policy establishes a robust framework for the mandatory holding of emergency reserves to insulate the South African economy."
The proposal follows concerns sparked by disruptions to shipping through the Strait of Hormuz, one of the world's most important oil transit routes, where heightened tensions raised fears of prolonged supply shortages and increased pressure on global energy markets.
Government Targets 60 Days of Emergency Fuel Supply
Under the proposed framework, South Africa plans to maintain emergency petroleum reserves equivalent to 60 days of national fuel demand.
Roughly two-thirds of those reserves would be stored as crude oil, while the remaining portion would consist of refined petroleum products to ensure immediate availability during emergencies.
To fund the initiative, the government said it is collaborating with the National Treasury to establish financing mechanisms for acquiring, maintaining and managing the country's strategic petroleum stockpiles.
According to the DMRE:
"The National Treasury and the state-owned South African National Petroleum Co. will develop financing mechanisms and instruments for the financing and guaranteeing strategic petroleum stocks."
Private Sector to Hold Additional Fuel Stocks
The draft policy also places new obligations on private sector participants in the petroleum industry.
Fuel manufacturers and wholesalers would be required to maintain an additional 14 days' supply of refined petroleum products, including diesel, petrol and aviation fuel.
The policy explains:
"The policy introduces a mandatory obligation for licensed manufacturers and wholesalers to maintain an additional 14 days of refined product stocks, such as diesel, petrol and jet fuel."
The government said the arrangement would create a two-tier system in which strategic government reserves provide long-term energy security, while industry-held inventories strengthen short-term supply resilience during unexpected disruptions.
Fuel Remains Critical to South Africa's Economy
According to the draft policy, South Africa consumes approximately 27 billion litres of petroleum products annually.
The transport sector alone depends on liquid fuels for around 90% of its energy requirements, underscoring the country's continued reliance on petroleum despite the global transition toward cleaner energy sources.
Officials warned that any prolonged interruption in fuel supplies could have severe economic consequences, affecting transportation, manufacturing, trade and other critical sectors of the economy.
Contrast With Nigeria's Changing Fuel Landscape
South Africa's continued dependence on imported petroleum products contrasts with recent developments in Nigeria, where the ramp-up of operations at the Dangote Refinery has significantly reduced the country's reliance on imported petrol.
While South Africa is seeking to strengthen its energy security by building larger emergency fuel reserves, Nigeria is increasingly focused on meeting domestic demand through expanded local refining capacity.
The proposed policy is currently open for public consultation, after which the government is expected to finalise a framework aimed at improving the country's preparedness for future global energy disruptions while enhancing long-term fuel security.