South Africa is preparing a major expansion of its emergency oil reserves as the government moves to strengthen energy security and protect the economy from global supply shocks.
The Department of Mineral and Petroleum Resources has published a draft Strategic Petroleum Stocks Policy that would raise the country’s state-controlled crude and fuel reserves from about 8 million barrels to 36 million barrels. If approved, it would be South Africa’s biggest stockpile expansion in 56 years.
A Bigger Buffer For Energy Security
The draft policy is designed to give South Africa a 60-day buffer of national fuel demand, based on average daily consumption of about 600,000 barrels.
Under the proposed framework, strategic stocks would be split between 70 percent crude oil and 30 percent refined products such as diesel, petrol, and jet fuel. These reserves would be managed by the newly formed South African National Petroleum Company.
The policy also places obligations on the private sector. Licensed wholesalers and fuel importers would be required to maintain an additional 21 days of commercial stock, creating a wider buffer across the supply chain.
Why The Government Is Acting Now
The push comes at a time when South Africa’s domestic refining base has weakened significantly. Over the past few years, the country has lost nearly half of its refining capacity as major plants shut down or shifted into import terminals.
That has made the economy more dependent on imported finished fuel, increasing exposure to shipping disruptions and geopolitical risk. With more than 90 percent of the transport sector relying on liquid fuels, any major interruption to supply could quickly ripple through the economy.
According to the department, every day of complete fuel unavailability costs the economy around 1 billion rand, or about 61 million dollars.
Storage And Financing Plans
The government plans to use existing state-owned infrastructure at Saldanha Bay and Milnerton for the strategic reserve. However, it still needs to acquire at least 10 million barrels of crude to replenish stocks that were previously depleted or unlawfully sold.
To fund the acquisition, storage, and maintenance of the reserves, the National Treasury and SANPC are developing financing mechanisms and state guarantees.
Why This Matters
South Africa’s proposal reflects a broader shift toward energy resilience. In a world shaped by supply chain uncertainty and geopolitical tension, strategic fuel reserves are becoming a critical economic safeguard.
If the draft policy is finalized, it could mark a major turning point in how South Africa manages energy risk, balances public and private responsibility, and protects the country from future fuel disruptions. Source Nairametrics
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