South Africa’s Minerals and Petroleum Resources Minister Gwede Mantashe has called for accelerating the development of the country’s oil and gas resources to address the country’s $19.6 billion dependence on imported oil. Speaking in Cape Town this week, Minister Mantashe said the ongoing Gulf War has exposed the country’s vulnerabilities and stressed that local exploration and production could reduce exposure to global market shocks.
“The sustainable long-term solution to our challenges lies in domestic production. This can only be achieved through rigorous exploration and responsible development of our own oil resources,” he said.
Imported fuel reveals South Africa’s energy exposure
South Africa faces the risk of fuel rationing as the conflict between the US and Iran exacerbates global supply chain disruptions, with petrol stations across the country already experiencing diesel shortages in several provinces. Pressure is mounting on fuel prices, with global oil prices soaring above $100 per barrel since the outbreak of the Gulf War, potentially triggering an increase of R2 to R4 per liter in April 2026. This situation highlights the urgent need to address structural weaknesses in South Africa’s energy system, particularly its dependence on imported fuels.
In 2025, South Africa’s imports of mineral fuels, petroleum and distillate products were approximately $19.63 billion, up from $9.7 billion in 2020. This increase reflects increased economic activity and continued dependence on foreign resources to meet domestic demand. This coincides with a reduction in domestic refining capacity. Several facilities, including the state-owned PetroSA refinery and Durban’s Engen refinery, have ceased operations or been converted into import terminals, leaving only NATREF and Astron Energy facilities operational. This exposes the country to the knock-on effects of global price fluctuations, logistics risks and fluctuations in fuel costs on transport, manufacturing and the broader cost of living.
“The truth is that rising oil and gas prices have a direct knock-on effect on the cost of living. Lack of access to these resources has an even greater impact as it can lead to energy poverty, increased unemployment and further entrenchment of poverty and inequality,” Minister Mantashe said.
Regulatory reforms aimed at addressing this issue
To address this vulnerability, governments are focusing on unlocking local hydrocarbons as part of a long-term energy security strategy. Gas and condensate discoveries in the South Outeniqua Basin confirm the existence of a working oil system, and the basin’s undeveloped deep water is believed to have a meaningful future. The country’s Orange Basin, which it shares with Namibia, has similar potential, where up to 11 billion barrels of oil and 2.2 trillion cubic feet of gas have already been identified. Geological continuity with nearby discovery sites has raised hopes that a similar migration type may also exist off the coast of South Africa.
Removing regulatory barriers, as the Ministry of Minerals and Petroleum Resources has promised, could free up local production capacity and create a path to self-sufficiency. Legislative reforms are already underway. The Upstream Petroleum Resources Development Act (currently being finalized and expected to be promulgated by the end of March 2026) provides a clearer and more modern legal framework for exploration and production, while the Petroleum Products Bill is being modernized to improve access to domestic resources and reduce import dependence. Additionally, the newly established South African National Oil Company is designed to centralize the country’s participation in the sector and coordinate exploration, licensing and production plans.
“These reforms aim to ensure fair access to the country’s oil resources and their sustainable development, and reduce the country’s dependence on imports of finished products to meet domestic demand in the long term,” Minister Mantashe said.
With the foundations in place, the real question is how quickly South Africa can leverage policies to attract investment and develop the exploration, production and infrastructure base needed to transform from an import-heavy market to a self-sustaining hydrocarbon economy.
