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ANC hints at state buying Sapref

An oil storage facility in Cape Town. Picture: Henk Kruger/African News Agency (ANA) Archives

An oil storage facility in Cape Town. Picture: Henk Kruger/African News Agency (ANA) Archives

Published May 21, 2022

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Cape Town - The ANC has proposed the idea of the State acquiring the refinery industry, with some refinery companies planning to close down their businesses.

This comes after BP and Shell indicated recently that they wanted to shut down crude oil refinery Sapref in KwaZulu-Natal.

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This led to the provincial government there urging the national government to intervene and save jobs.

Minister of Minerals and Energy Gwede Mantashe confirmed this week that the government was heavily involved in discussions about the state buying Sapref.

It would wait for the outcome of the discussions.

In its discussion documents, in a section titled “strengthening economic recovery and reconstruction to build an inclusive society”, the ANC has called on the state to play a role in the refinery industry.

It said it was worried about the refinery capacity in the country, with some of the plants having been closed.

“There has recently been closure of refineries by some oil companies, as they have chosen to import refined fuel products rather than invest in cleaner fuel-refining technologies.

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“A feasibility study should be undertaken to assess the business case for public investment in the oil-refining sector. A detailed cost-benefit analysis should be undertaken to assess whether such an investment would be viable or would impose undue costs on South African taxpayers and consumers.

“The analysis should include a study of the impact of reduced refining capacity on the security of supply and costs of associated petrochemical products such as bitumen and lubricants.

“This should also include an investigation of options to look at more low-carbon, including renewable, refining methods, with a critical role for South African research and development and science and technology institutions, as well as partnerships with global technology leaders in such low-carbon or renewable fuel products,” said the ANC.

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The ruling party also raised concerns about rising fuel prices.

It said this was not a domestic issue, but rather a global problem.

Since the war between Ukraine and Russia broke out in February, oil prices have increased over the last few months.

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Mantashe and Finance Minister Enoch Godongwana earlier intervened to mitigate the high fuel prices. They secured R6 billion of stock from the strategic fuel fund for two months.

But it appears petrol prices are set to increase significantly in June, and the government has not indicated it will intervene again after Mantashe said fuel prices would rise.

The ANC also said mining was still an important player in the economy.

Mining employs about 500 000 people and contributes significantly to the country’s GDP.

The party said mining was not a sunset industry, as some wanted to believe.

It called for more investments in the mining sector to grow the economy and employ more people.

The ANC wants mining to continue with exploration.

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Political Bureau

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