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Neglecting South Africa’s capacity to store and refine crude oil could force country to take a new direction

A report by the parliamentary Portfolio Committee on Mineral Resources and Energy, based on a recent oversight visit to the crude oil storage facilities in Saldanha Bay and Milnerton, was debated in the National Assembly yesterday. The FF Plus stated that the serious neglect of these facilities could be a blessing in disguise.

The visit was prompted by the controversial sale of a portion of South Africa's strategic oil reserves, which was overturned by a court order. During the visit, committee members noticed that the huge oil tanks in Saldanha Bay are being underutilised, while those in Milnerton have been standing empty and decaying for more than 13 years. The land on which they stand was even sold to a developer; another transaction that was subsequently overturned by the court.

According to the report, South Africa has the world's largest oil storage facilities. They are situated close to the refineries in the Western Cape and Mpumalanga with the aim of stabilising the country's fuel supply. The report, however, fails to make explicit mention of the fact that South Africa's ability to produce finished fuel products has declined over the years. Storing crude oil only makes sense if the ability to refine it exists.

The truth is that South African refineries have not kept up to date with the latest technological and commercial developments. In order to meet modern standards and enable competitive pricing, fuel companies have no choice but to import a larger fraction of their supply in finished form every year. As a result, the refineries that break down or burn down, like the Engen plant in Durban, are simply not repaired and often stop operations altogether.

The report's content is fairly depressing. It may, however, be a blessing in disguise. It is becoming more and more clear that the future of transport does not lie in fossil fuels. Large-scale investment in facilities to store and process crude oil could keep the country stuck in the energy past.

The transition to electric transport, powered by renewable sources, may quite possibly be necessitated in South Africa due to availability, not affordability or climate targets.

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