Diesel is in short supply around SA – and these areas could be worst affected
- South Africa has begun to implement diesel rationing following unexpected high demand after lockdown.
- Officially, it's only supposed to last until the end of the month, but the DA says rationing might last till mid-June.
- Half of the country's six oil refineries were mothballed for lockdown and are only coming online now, while a third ran into technical problems.
- For more articles, go to www.BusinessInsider.co.za.
Diesel shortages might continue until mid-June, and it is likely to hit KwaZulu-Natal and the interior of the country most.
The South African Petroleum Industry Association (Sapia) announced yesterday that the country had begun to implement diesel rationing. The association expects the shortage to last until the end of the month.
In response to questions from Business Insider, Sapia said that "at this stage" the impact of the shortage is on commercial and industry, sparing consumers. The organisation said the interior and KwaZulu-Natal would be most affected.
The demand for diesel is close to what it was prior to the lockdown, said Sapia, suggesting surprising resilience in the economy. “The opening of the economy has resulted in a more rapid recovery than expected,” said Sapia in a statement. “There has been a dramatic increase in demand for diesel.” The organisation said the country has begun stock rationing in order “manage demand and to preserve stock”.
The good news is that petrol is not affected. A spokesperson for Sapia said the demand for petrol had declined by 60% during lockdown, which meant that producers had sufficient supply. In addition, "the demand for petrol since the opening of the economy has not increased as dramatically as it has for diesel," said the organisation.
The country shut down some of its refining capacity when the lockdown began. Of the country's six oil refineries, only two are currently working at normal production levels.
According to Sapia, Cape Town's Astron Energy refinery is "on a planned maintenance shutdown and expected to be back online in July". The Natref refinery in Sasolburg is "on an unplanned shutdown and expected to be back online mid-June".
Two further refineries, Engen and Sapref "are currently starting up with on spec production expected by this weekend". That means that only two refineries, Secunda and the PetroSA refinery in Mossel Bay, are currently online.
Kevin Mileham, the DA’s shadow minister for minerals and energy, expects that the diesel shortage could last much longer than mid-June. “It appears that the refineries will restart after this coming weekend, which should see stock levels normalise at some point thereafter. But we don't know exactly when, and it could be as late as mid-June.”
South African motorists are expected back at the pumps soon as the lockdown moves to stage three and the partial reopening of the economy continues. Both diesel and petrol prices are expected to rise next week, according to the AA. The increase is driven to part by a rise in the price of Brent crude oil from $29 per barrel to $36.
The price of 93 is expected to increase by about R1,03/l and the price of 95 by about R1,13/l. Diesel is expected to increase by about R0,13/l.
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