South Africa was once able to refine a meaningful portion of its own petroleum needs. That capacity is beginning to erode fast.
Image: TV BRICS
There is somewhat of an irony in the fact that a continent sitting on some of the world's most significant hydrocarbon reserves but still struggles to keep the lights on and fuel in the pump. South Africa knows this irony intimately. In 2026, the country finds itself in a familiar but much more urgent position: heavily reliant on imported oil, watching major international energy companies exit its refining sector, and scrambling to expand import infrastructure in order to maintain baseline supply. For a nation that ranks among Africa's largest economies, the fragility of its energy supply chain is not a footnote, it is a defining challenge of this decade.
Understanding what is happening in South Africa's oil and gas sector right now requires more than a list of facts. It demands context, comparison, and a clear-eyed look at where structural decisions, and indecisions, have brought the country to this point.
South Africa was once able to refine a meaningful portion of its own petroleum needs. That capacity is beginning to erode fast. Shell and BP, two of the most prestigious names in global energy, have both moved to exit local refinery operations in recent years. Shell offloaded its stake in the SAPREF refinery in Durban, once one of the largest in sub-Saharan Africa , and BP followed a similar path. The message from both companies is clear: South African refining is not commercially viable in its current form.
Compare this to what is happening in Saudi Arabia for example, where Aramco is continuing to invest in integrated refining and petrochemical capacity, or in Nigeria, which regardless of its own infrastructure dysfunction is pinning significant hopes on the Dangote Refinery in Lagos. That facility, when fully operational, promises to process up to 650,000 barrels per day, which is enough to potentially reshape fuel supply dynamics across West Africa. South Africa has no comparable domestic project on the horizon.
The exits by Shell and BP are not just corporate decisions. They reflect a broader truth: without consistent government policy support, aging infrastructure upgrades, and a viable long-term market signal, private capital is not going to anchor itself to high-risk refining operations in emerging markets. South Africa has struggled to provide that certainty, and the downstream sector is paying the price.
With domestic refining capacity decreasing, South Africa's dependence on imports has deepened considerably. The country draws the majority of its petroleum from Nigeria and Saudi Arabia , this is a dependence that exposes it to geopolitical volatility, shipping disruptions, and currency risk all at once. When the rand weakens against the dollar, as it frequently does, the cost of every imported barrel rises accordingly, passing directly to consumers through fuel price adjustments.
In late 2025, the Transnet National Ports Authority (TNPA) secured new LPG import capacity at the Port of Durban. This is a pragmatic response to supply pressure, but it also underscores how reactive South Africa's energy planning has become. Rather than building out domestic production or refining, the strategy has now effectively become: import more, and import it faster. Durban's port is the economic gateway for much of Southern Africa, and expanding its LPG throughput capacity does provide short-term relief, it just deepens structural dependency rather than resolving it.
This mirrors what happened in many Southeast Asian countries in the 1990s, when rapid industrial growth outpaced domestic energy production and import reliance ballooned. Countries such as South Korea responded by investing heavily in refining and petrochemical infrastructure, eventually becoming net exporters of refined products. South Africa, by contrast, appears to be moving in the opposite direction, reducing refining capacity rather than expanding it.
South Africa's oil and gas sector in 2026 is a sector defined more by what it is losing rather than what it is building. Refinery capacity is declining. Import dependency is rising. International capital is also exiting. And the energy transition, while urgently needed, remains underfunded and undercoordinated.
The country is not without options. A clear, stable regulatory framework for upstream oil and gas exploration , one that actually attracts capital rather than deterring it could unlock domestic production potential. Accelerated investment in LNG import terminals, rather than just LPG capacity, could provide a more versatile energy bridge. And a genuine public-private partnership model for refinery rehabilitation or replacement could slow the downstream haemorrhage.
However, all of that requires something South Africa's energy sector has struggled to sustain: political will matched with execution capability. The country has excellent policy documents and under-resourced implementation. It has ambitious transition targets and coal plants that are likely to run for decades. It has a port expansion in Durban and a refinery landscape that keeps shrinking.
*Sesona Mdlokovana
Associate at BRICS+ Consulting Group
Africa Specialist
**The Views expressed do not necessarily reflect the views of Independent Media or IOL.
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