The oil industry is commonly divided into upstream and downstream activities. Upstream activities encompass the exploration and production of crude oil and natural gas, while downstream activities include the refining, transportation, distribution, and marketing of petroleum products to end users. South Africa has no meaningful domestic crude oil reserves, and consequently all crude oil requirements are met through imports, sourced primarily from the Middle East and Africa.
The principal petroleum products marketed in South Africa include petrol, diesel, jet fuel, illuminating paraffin, fuel oil, bitumen, and liquefied petroleum gas (LPG). Of these, petrol and diesel constitute the dominant liquid fuels consumed in the domestic market, accounting for the majority of transport and commercial energy demand.
The retail price of petrol is fully regulated by government, with the pricing framework providing for regulated and allowable margins along the value chain, as well as the inclusion of taxes, levies, and duties that accrue to the fiscus. South Africa’s petroleum pricing system is anchored by the Basic Fuel Price (BFP), which is a formula‑based mechanism intended to reflect the realistic, market‑related cost of importing a substantial portion of the country’s liquid fuel requirements.
The BFP assumes that petroleum products are sourced from competitive international refining centres capable of meeting South Africa’s product quality specifications and supply reliability needs. Consequently, domestic fuel prices are influenced primarily by international petroleum product prices, global supply and demand dynamics, and the rand/US dollar exchange rate, rather than by local refining cost structures alone.
Refined Petroleum Products are Produced by the Following Methods:
- Crude Oil Refining;
- Coal-to-Liquids Processes (Sasol Secunda);
- Natural Gas to Liquid Fuels (PetroSA).
Demand & Supply
South Africa’s liquid fuels refining landscape has changed significantly over the past two decades, with a marked decline in domestic refining capacity and increased reliance on imports. While the country historically operated multiple crude oil and synthetic fuel refineries, only a limited number are currently operational, and the sector has transitioned toward a structurally import-dependent model.
At present, South Africa has three operational refining facilities:
- Astron Energy Refinery (Cape Town), a crude oil refinery supplying the Western Cape;
- Natref Refinery (Sasolburg), a crude oil refinery supplying primarily the inland market; and
Sasol Secunda, a large-scale coal-to-liquids (CTL) facility producing synthetic fuels for domestic consumption. Crude oil processed at South Africa’s crude refineries is entirely imported, reflecting the country’s limited proven crude oil reserves. Feedstock supply is sourced primarily from international markets, while synthetic fuel production remains dependent on South Africa’s abundant coal resources. The reduced availability of domestic refining capacity has heightened the strategic importance of import terminals, coastal storage infrastructure, pipelines, and logistics resilience.
In this context, the focus of the liquid fuels sector has shifted from refinery capacity expansion toward security of supply, infrastructure adequacy, and regulatory flexibility to accommodate increased import reliance.
Distribution
Petroleum products are transported from refineries and import terminals via pipelines, rail, sea, and road to approximately 200 depots, about 4 000 service stations, and an estimated 100 000 direct consumers, the majority of whom operate in the agricultural sector.
South African Refinery Ownership and Crude Throughput
| Crude Oil Refined at the Following Refineries: | ||
| Name | Crude throughput (2013) | Ownership |
|---|---|---|
| Astron Energy | 100 000 barrels per day | Astron Energy |
| Natref | 108 000 barrels per day | Sasol/TotalEnergies (64%/36%) |
| Coal and Gas Processed and Refined At: | ||
| Name | Crude throughput (2013) | Ownership |
| Sasol Secunda | 150 000 barrels per day | Sasol |
| (Crude equivalent at average yield) | ||
Wholesaling
Astron Energy, BP Southern Africa, Engen Petroleum, Puma Energy, PetroSA, Sasol Oil, Shell South Africa and TotalEnergies South Africa are the main wholesalers in the South African fuels industry.
They operate storage terminals and distribution facilities throughout the country. In 2005, there were few licensed wholesalers supplying petrol and diesel in South Africa.
Today, there are more than 6,000 wholesalers licensed by the Department of Mineral and Petroleum Resources.
Industry role players
The major role players in the South African liquid fuels market are government and its associated institutions, as well as the Fuels Industry Association of South Africa members.
The Department of Mineral and Petroleum Resources (DMPR) is responsible for ensuring the secure and sustainable provision of energy for socio-economic development.
Through institutions like the Central Energy Fund (CEF) and the National Energy Regulator of South Africa (NERSA), the government plays a significant role in the South African liquid fuels market.
Retailing
There are approximately 5,500 service stations (forecourts in South Africa, comprising both company owned and dealer owned sites.
The Petroleum Products Amendment Act, 2003 introduced a comprehensive licensing regime covering manufacturing, wholesaling, and retailing activities. This regime requires licensees to comply with a range of regulatory requirements, including the annual submission of prescribed information to the Department of Mineral and Petroleum Resources (DMPR).
Manufacturers and wholesalers are prohibited from holding retail licences, except for limited training purposes. As a result, members of the Fuels Industry Association of South Africa are restricted to holding a limited number of retail licences. In practice, branded retail sites typically operate under a franchise model, whereby the Association member companies franchise service stations to independent dealers and supply them directly with petroleum products under contractual arrangements.
In addition, the market includes independently operated and unbranded service stations, as well as stations that are independently owned but branded under supply agreements with oil companies that provide petroleum products.
