Parliament, Thursday, 27 March 2025 — Following its oversight visit to the Strategic Fuel Fund (SFF) this week, the Portfolio Committee on Mineral and Petroleum Resources has raised concern about the “insufficient” strategic fuel reserves available to provide uninterrupted service in cases of emergency.

The committee conducted a two-day oversight visit to the SFF in Saldanha on Tuesday to ensure that the SFF has sufficient petroleum reserves to keep the supply uninterrupted during a crisis. On Wednesday, the committee visited the Astron Energy Refinery in Milnerton to assess Astron’s readiness for the 2027 clean fuels deadline.

During the visit to SFF, the committee inquired about, among other things, the storage tanks refurbishment project, including timelines, service providers and updates on the progress of constructing LPG loading facilities. The committee heard about SFF’s current capacity and capabilities in handling oil spills, particularly in the context of its partnership with the Oil Pollution Control agencies in Africa. Lastly, the committee sought to learn about the costs incurred by SFF in court cases related to the sale of strategic stock.

“We are not satisfied with the amount of strategic fuel reserves that the SFF is keeping in stock. As a committee, we believe it is pointless to refine if we do not have sufficient storage or if the limited storage available is not optimally utilised,” said Committee Chairperson Mr Mikateko Mahlaule.

SFF and PetroSA Acting Group Chief Executive Officer, Ms Sesakho Magadla, highlighted the complexity of increasing crude oil kept in storage as the market is not conducive. “The market is currently depressed; we are only using two of the six tanks for our reserves. Negotiations are at an advanced stage with an international company that will rent one tank,” said Ms Magadla.

On the issue of the new clean fuels requirements, Ms Magadla said the SFF is not directly affected by the new requirements and had minimal exposure compared to refineries.

Amongst the SFF’s other challenges, Ms Magadla mentioned the issue of split powers, as the entity still straddles two departments – the Department of Mineral and Petroleum Resources and the newly formed Electricity and Energy department. She mentioned the need for streamlining to avoid confusion and delays in approval processes.

Chairperson Mahlaule said the SFF must resolve and clarify the contractual and financial arrangements between itself and Astron regarding pipeline operations. He urged them to ensure that SFF is receiving the appropriate rental income.

“We also want them to explore ways to accelerate the construction of the pipeline connecting the Avedia facility to generate revenue. They must also engage in negotiations with any third parties interested in connecting to the pipeline, to ensure SFF’s interests are protected,” he said.

In addition, during their next meeting with the Central Energy Fund (CEF) Group, the committee will request a comprehensive presentation on the CEF’s emergency response plan to keep the supply going.

In June 2020, the then Minister of Mineral Resources and Energy mandated the creation of the NPC through the merger of iGas, SFF and PetroSA – the three are subsidiaries of CEF Group.

Concerning Astron, Chairperson Mahlaule stated that the committee is confident in Astron’s assurances regarding its ability to remain in the local refining sector and comply with the SA Clean Fuels 2 specifications, as well as the framework agreement conditions.

This new legislation comes into effect on 1 July 2027 and implements tighter constraints through significant reductions of sulphur and benzene content in gasoline and tighter constraints in diesel sulphur and cetane index.

In April last year, Astron approved the installation of a licensed gasoline hydrotreating process to ensure the refinery can produce gasoline to meet local demand and is not dependent on imports, including the associated commercial and pricing uncertainties.

The committee heard that the selected pathway ensures that Astron meets the framework agreement conditions, allowing it to continue operating the refinery beyond July 2027 through meeting the SA CFII specifications requirements.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON MINERAL AND PETROLEUM RESOURCES, MR MIKATEKO MAHLAULE.

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