‘Fuel outage’ warning for South Africa

South African jet fuel suppliers need to maintain higher stock levels in the event of production outages, such as the one at Sasol’s Natref refinery last week, which prompted airlines to make backup plans, Chief Executive Officer Simon Baloyi said.

Natref has taken measures, following issues on some units, that leave a “low probability” of potential jet-fuel shortages at Johannesburg’s OR Tambo International Airport — the nation’s busiest — but suppliers should be better prepared, he said in an interview Tuesday.

Airlines last week made contingency arrangements and the Department of Energy convened an emergency meeting with the airport and the Fuels Industry Association of South Africa due to the refinery disruption.

Baloyi said that in light of current geopolitics — which have included oil shocks to both prices and physical supply because of the Iran war — he was surprised at the inadequate levels of jet fuel held by suppliers.

“You can’t run with low inventory,” he said. “Operational plants are operational plants — they’ll go up, they’ll go down.”

The Iran war has forced South Africa and other nations on the continent that are reliant on fuel imports to find new sources of supply.

That’s also highlighted the need for higher inventory levels to prevent future shortages.

The Department of Mineral and Petroleum Resources proposed in July that 60 days of demand be covered by reserves, of which about two-thirds will be crude and the remainder oil products.

Licensed wholesalers and importers would be required to keep 21 days of inventory under the plan.

Vitol Group’s Vivo Energy is building fuel tanks at a former refinery site in the eastern port city of Durban, a R2.1 billion project that commenced before the start of the war. The 300,000 cubic metres of capacity is scheduled for completion in the third quarter of next year.