Parliament Urges Transformation in South Africa's Petroleum Industry

Strategic Insights -

Members of the Portfolio Committee on Trade, Industry, and Competition, and the Portfolio Committee on Transport met with black traders on concerns raised about the Minister of Transport's directive to renew leases at the Transnet Island View Precinct (IVP). The meeting aimed to follow up on the previous discussion on 14 October 2025, where the Minister of Transport briefed the committees on the Section 79 directive, instructing Transnet to conclude new 25-year Terminal Operator Agreements at the IVP by 31 March 2026. The IVP is a crucial hub for South Africa's fuel imports and storage, supplying the majority of the country's fuel requirements.

Key Takeaways:

  • The black traders operating in the petroleum industry voiced concerns about the lack of access to port terminals and storage facilities, which are controlled by larger foreign-owned oil companies (oil majors).
  • The oil majors allegedly use their control to hinder black traders with the technical and financial capacity from berthing imported liquid fuel products under competitive conditions.
  • The black traders argued that the limited access provided to the Central Energy Fund (CEF) would not have the expected trickle-down effect, as it would not promote economies of scale.
  • Certain stakeholders were concerned that the Section 79 process followed by the Minister of Transport was procedurally defective, lacking effective consultation with relevant public and private stakeholders.
  • NERSA, responsible for regulating the petroleum industry, indicated that it had not been formally consulted during the Section 79 application process but would scrutinise the directive to ensure alignment with the Petroleum Products Act.
  • The chairpersons of the committees emphasized the importance of energy security and domestic refining capacity to protect South Africa's sovereignty and national security.

Statistics:

  • 85% of the storage capacity at the IVP is operated by the oil majors.
  • The Central Energy Fund (CEF) initially holds a 15% share, which can grow to 30% in future.
  • The demand for fuel imports and storage is supplied by the IVP, which is critical for South Africa's fuel requirements.
  • The Section 79 directive instructs Transnet to conclude new 25-year Terminal Operator Agreements at the IVP by 31 March 2026.

Sources:

  • Portfolio Committee on Trade, Industry, and Competition, and the Portfolio Committee on Transport.
  • Minister of Transport, Ms Barbara Creecy.
  • Chairpersons of the Portfolio Committee on Trade, Industry, and Competition, Mr Mzwandile Masina, and the Chairperson of the Portfolio Committee on Transport, Mr Donald Selamolela.
  • Central Energy Fund (CEF).
  • National Energy Regulator of South Africa (NERSA).