SA considering buying Russian oil, energy minister says

As a possible measure to mitigate steep fuel prices.
Gwede Mantashe. Image: Waldo Swiegers/Bloomberg

South Africa is considering buying oil from Russia as a possible measure to mitigate steep fuel prices, Mineral Resources and Energy Minister Gwede Mantashe said.

“It is an idea,” Mantashe said by phone from Cape Town. “Russian oil is not on the sanctions list.”

A purchase is far from being finalised and would first have to go through a complex government procurement process, the minister said.

© 2022 Bloomberg

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Since when is our government an oil dealer? It should maintain a strategic oil reserve if it doesn’t sell it to its corrupt mates at Glencore in exchange for them selling coal mines to the Guptas. To my knowledge the only state connection is Mosgas that does not take oil base stock.

Likely : the closed oil refinery the unions will take over will be putin’s new best buddies.

Expect NO relief at the pump for the 35% cheaper Urals oil : our prices are regulated. The profits from Ukranian war will go to somebody’s pocket and that ain’t your pocket.

In the same way I would boycot Shell service stations if they fracked the Karoo I would boycot any service station that sells putin or ukranian oil products.

Just when you thought that the ANC could not get any worse in their lack of ethics and morals, they turn to one of the most brutal despots since Hitler?

Am I surprised? Not in the least.

He will find that very hard as the fuel companies themselves will face the wrath – also internationally !!!!!!!!!!!!…

Also Urals oil is chemically different (sourer?) so need to change refinery process and will generate different product mix. That big refinery in Natal gave up with talk that the unions will buy it with government help, so the oil majors not involved directly, only to extent that they take product from that refinery.

Question is will any of the majors risk their international reputation for a few barrels of Russian oil ??? I do not think so.

Why do we need to buy crude oil from Russia? Angola is on our doorstep and a SADIC member. There are other suppliers along the West African coast, and freight will be a lot less than from Russia. Anyway, when does the government arrange the purchase of Crude oil, the refiner normally does that because they know what suits their refining facility. Crude oil from various sources is different it is not one glove that fits all. It is more complex than let buy from ABC or XYZ. ask anyone involved in the refining industry.
As for taking over SAPREF and running it as an SOE that is just ridiculous the facility is about 66 years old and Shell / BP knows that it passed its sell-by date and needs huge amounts of money to modernize. In their opinion, it is simply not worthwhile. I cannot imagine that the minister knows more than these massive corporations that have refineries all over the world.

Dear ChrisParry – Please don’t introduce facts into this discussion. It makes the brains of many people explode … primarily putinistas and ANC tenderpreuneurs.

The way we calculate the Basic Fuel Price is also unreal. Sasol coal from oil for example is deemed to have been refined product purchased in Singapore, the Med and another place at market rates, shipped here at deemed shipping costs, insurance on the non-shipment, normal losses on the non-shipment and deemed pipeline cost. Besides Sasol, none of the majors source refined product from those deemed locations; they extract their own product at cost from wherever they have what they need here and refine here. There is a tremendous hidden margin between deemed BFP and actual refined cost of products.

The Sasol fuels profit margin is slim and gets negative for a low fuel price – They only really make money from their chemicals, waxes, explosives and polymer sales.

casper: sorry, but if Sasol cannot make SUPER profits off this BFP at ruling crude and refined product prices they should close their doors. Different story when Brent is at $55

Chris, sounds like you know this game. Has anybody worked out what it will cost the old partners to shut and rehabilitate that SAPREF facility? There is a LOT of scrap metal but I venture rehab (if they have such an obligation?) will be multiples of the scrap value. Many years ago we ran an analysis for a platinum refinery whether it made sense to shred their old plant and the top few feet of topsoil to process through the new refinery. it’s one thing with $1500/ounce of embedded PGM, whereas oil polluted waste costs money to be rid of. I would not be surprised to see SAPREF get a second life whereby the new (cleverer cleverest) owners are PAID to take it over including rehab liability, with a nice DTI deal in back pocket.

End of comments.

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