For the first time in decades, South Africa is getting ready to drastically increase its strategic oil reserves in an effort to bolster the nation's energy cushion against any disruptions in the global supply chain.
The Department of Mineral Resources and Energy (DMRE) suggested keeping strategic reserves equal to 60 days of the country's fuel needs in a draft policy that was made available for public comment on July 9.
The National Treasury and the state-owned South African National Petroleum Co. “will develop financing mechanisms and instruments for the financing and guaranteeing strategic petroleum stocks,” the DMRE said.
Per the plan, crude oil would make up about 70% of the reserve, with the newly formed South African National Petroleum Company (SANPC) overseeing the remaining percentage of refined petroleum products.
The estimates show that the Southern African country consumes over 600,000 barrels of oil every day; therefore, the idea would need around 36 million barrels of strategic reserves.
