South Africa Proposes Mandatory 90-Day Strategic Fuel Reserves

The Department of Mineral and Petroleum Resources has proposed a Strategic Stocks Policy to protect South Africa from global supply shocks and geopolitical tensions in the Middle East, specifically regarding the Strait of Hormuz. The plan establishes the country's largest oil reserves since the 1970s, aiming for a total of 90 days of net-import reserves. This total consists of a 60-day government reserve and a mandatory 21-day reserve for licensed oil and fuel wholesalers and importers, who must maintain these stocks at their own expense.

Under the draft policy, reserves will be split between 70% crude oil and 30% refined products, such as diesel, petrol, and jet fuel. Government stocks—approximately 36 million barrels—will be managed at facilities in Saldanha and Milnerton. Minister Gwede Mantashe noted the policy responds to fuel price surges and shortages following the outbreak of war in the Middle East in February. Non-compliant companies may face imprisonment, and the government plans to trigger fuel rationing if a supply shock reduces fuel supply by more than 50%.

The government is currently coordinating with the National Treasury and the South African National Petroleum Co. to determine financing mechanisms for the acquisition and maintenance of these stocks. The proposal is currently open for public consultation.