Energy department cautions against closure of oil refineries

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The Department of Minerals and Energy has cautioned against the closure of oil refineries in the country, saying this will have a devastating impact on the South African economy.

The department says there is a challenge worldwide of closing down of oil refineries due to various factors, but says the measure should not be indefinite.

Department of Minerals and Energy DDG, Tseliso Maqubela, says inland refineries are critical as the economic hub of the country is inland. He says a mega refinery is needed so as to mitigate the impact of closure of some of the refineries in the country and globally.

“If we don’t do all of these other things, then we have to build a mega refinery, now we need to balance that mega refinery against the future that is envisaged by car manufacturers of not having internal combustion engines by certain years,” adds Maqubela.

On fuel levy concerns raised by some members of Parliament’s Portfolio Committee on Minerals and Energy, the DDG said: “I think that the whole issue of the Road Accident Fund it would need to be looked at, we don’t have the solution because it seats outside our portfolio. I would agree that what has been raised is a looming danger and that is to be looked at so that when you start introducing electric vehicles the room to maneuver for raising funding for the road accident through funding fuel will diminish.”

Over 37% of the retail price of fuel in South Africa is government taxes, which include among others the Road Accident Fund (RAF) and Fuel Levy.

Below is a discussion on government’s efforts to improve the energy sector: