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Industry Overview - South African Fuel Industry

South Africa consumed approximately 11.3-billion litres of petrol and 9.1-billion litres of diesel during 2009, showing a 2.2% increase in petrol and a 6.6% decrease in diesel from the previous year. During 2008 there was a 4.2% decrease in petrol consumption and a 0.1% increase in diesel consumption from 2007.

Government regulates wholesale margins and controls the retail price of petrol. The petrol price in South Africa is linked to the price of petrol in United States (US) dollars in certain international petrol markets. This means that the domestic price is influenced by supply and demand for petroleum products in international markets, combined with the rand/dollar exchange rate (Source: South Africa Yearbook 2008/09).


Consumption of petrol and diesel in South Africa from 1988 – 2009

Refining

South Africa has very limited oil reserves and about 95% of its crude oil requirements are met by imports from the Middle East and Africa (Source: South Africa Yearbook 2008/09). There are six refineries in the country; four of the refineries are on the coast and two are inland.

Distribution

Petroleum products are moved from refineries by pipelines, rail, sea and road to approximately 200 depots, 4 600 service stations and 100 000 direct consumers who are mostly farmers. Gauteng consumes the largest amount of petrol and diesel in the country.

Wholesaling

BP Southern Africa, Chevron South Africa, Engen Petroleum, PetroSA, Sasol Oil, Shell South Africa and Total South Africa are the main players in the South African oil industry. They operate storage terminals and distribution facilities throughout the country. Until recently, there were very few non-refining wholesalers supplying petrol and diesel in South Africa. Today, there are a number that are registered with the Department of Energy.

Retailing

There are approximately 4 600 service stations (forecourts, company owned and dealer owned) in South Africa. The petroleum industry was licensed for the first time in 2005, in terms of the Petroleum Products Amendment Act, 2003. Government limits the number of licences allocated. Manufacturers and wholesalers are prohibited from holding a retail licence except for training purposes. SAPIA members are therefore restricted to a limited number of retail licences.

SAPIA members do have the option to franchise a station to an independent dealer and directly supply it with petroleum products. There are also stations that are independently operated and unbranded.