South Africa’s domestic oil refining has slumped to just a third of capacity, leaving the country more dependent on fuel imports just as it’s swept by civil unrest.
Violence that began last week after former President Jacob Zuma was sent to jail has resulted in widespread looting and disrupting to supply routes. On Tuesday, it forced the temporary shutdown of the 180 000-barrel-a-day Sapref refinery, a joint venture between Royal Dutch Shell Plc and BP Plc.
South Africa’s refining industry, which has a nominal daily capacity of 700 000 barrels, had already been hobbled by accidents — an explosion at Glencore Plc.’s Cape Town refinery and a fire at Engen’s Durban plant.
Engen already decided that refitting its facility would be too costly, so it will be converted into a fuel terminal instead. That could be the fate of other facilities, which face costly upgrades to comply with South Africa’s pending low-sulfur fuel regulations.