How the COVID-19 lockdown is impacting petrol supply in SA

The South African petroleum industry is facing challenges amidst the COVID-19 lockdown and the reopening of the global economy. Petrol prices in South Africa saw an increase amid expectations of rising oil supply. However, concerns have been raised by the Parliamentary Portfolio Committee regarding a possible diesel shortage in the country due to a slowdown in national refinery production. Avhapfani Tshifularo, Executive Director at the SA Petroleum Industry Association, joined CNBC Africa to discuss the current situation and potential solutions. Tshifularo reassured that despite the concerns raised, there is no imminent diesel shortage in South Africa. He mentioned that two refineries, sub-ref and unrest-refinery, were expected to be fully operational by the end of the month, ensuring sufficient production of diesel and other petroleum products. As South Africa transitions from lockdown level four to level three, the industry is bracing for new challenges and costs associated with COVID-19 precautions. With more economic activities resuming, there has been a notable increase in diesel consumption. To manage the demand, rationing of existing stock has been implemented until the refineries are back online. However, a recent attempt to steal products from Transnet pipelines resulted in a shutdown, potentially affecting the transportation of petroleum products between Deben and Johannesburg. Tshifularo highlighted the importance of swift repairs to avoid disruptions in product availability in the inland market. The industry is closely monitoring the situation and awaiting the pipeline's return to service. Tshifularo emphasized the need for enhanced security measures to protect the pipelines and prevent future incidents of theft, which pose a threat to national security in the supply of petroleum products. The issue of payments in these challenging times was also addressed. Tshifularo explained that the drastic reduction in demand for petroleum products during the lockdown led to a decrease in payments to suppliers. However, the prepayment system in the industry ensures that forecourt owners pay for the petrol before delivery, minimizing payment-related issues. Overall, the South African petroleum industry is navigating through unprecedented times with a focus on ensuring continuity in supply chain operations and addressing emerging challenges effectively.