The Department of Mineral and Petroleum Resources (DMPR) oversees South Africa’s petroleum sector through its Hydrocarbons and Energy Planning Branch. This branch is responsible for coal, gas, liquid fuels, energy efficiency, renewable energy, and energy planning — including the national energy database and the country’s liquid fuels regulatory framework.
Petroleum Licensing Framework
The liquid fuels industry was licensed for the first time in 2005, under the Petroleum Products Amendment Act, 2003 (Act No. 58 of 2003). This regulatory framework promotes transparency, efficiency, and equity within the petroleum sector, guided by the following objectives:
Efficiency
Promoting efficient manufacturing, wholesaling, and retailing within the petroleum industry.
Investment
Facilitating a conducive environment for efficient and commercially justifiable investment.
Transformation
Advancing the participation of historically disadvantaged individuals in the sector.
Employment
Creating jobs and supporting small business development within the petroleum industry.
Production and Supply Overview
According to SAPIA (2005), South Africa produced 23,571 million litres of liquid fuel products. Approximately 36% of this demand was met by synthetic fuels (synfuels) produced locally from coal and natural gas, while the remaining 64% was refined from imported crude oil.
23,571
Million litres produced in 2005
64%
Refined from Imported Crude
Petrol Pricing Dynamics
The petrol price in South Africa is directly linked to international crude oil prices, quoted in US dollars per barrel. Prices are influenced by global supply and demand factors and the Rand/US Dollar exchange rate. The combination of these elements determines the cost structure for local refineries and ultimately, the consumer petrol price.
When crude oil prices increase, refineries’ input costs rise. To remain viable, the price of refined products must exceed crude oil costs — hence, petrol prices fluctuate in response to global market movements.