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South African lawmakers said they’re concerned about “insufficient” strategic oil stockpiles after visiting a government-owned crude-storage hub.
The Strategic Fuel Fund manages the Saldanha Bay crude terminal with six in-ground tanks capable of holding as much as 45 million barrels, enough to fill more than 20 large tankers. Parliament’s Portfolio Committee on Mineral and Petroleum Resources raised questions after it found much of that storage is empty.
“We are not satisfied with the amount of strategic fuel reserves that the SFF is keeping in stock,” Mikateko Mahlaule, the committee chairperson, said in a statement. “We believe it is pointless to refine if we do not have sufficient storage or if the limited storage available is not optimally utilised.”
The issue emerges after a decade of the government reducing strategic crude supplies. South Africa was still selling some of these reserves in November in order to fund measures introduced in 2022 to cushion consumers from a spike in road-fuel prices through a subsidy.
The SFF issued at least one tender last year to sell 3.5 million barrels of Iraqi Basrah Light crude. It also sold stocks in a 2015 sale that a court ultimately found was unlawful.
Oil prices have lagged in the last year. Only two of Saldanha’s six tanks are being used for reserves and “negotiations are at an advanced stage with an international company that will rent one tank,” SFF Acting Group Chief Executive Officer Sesakho Magadla said in the statement. “The market is currently depressed.” – Bloomberg
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