Mantashe urges South Africans not to panic over fuel shortage as ships pass through Strait of Hormuz
South Africa's fuel supply remains stable for now, but massive price hikes loom. Here is what the minister had to say about the crisis unfolding in the Middle East.
Mineral and Petroleum Resources Minister Gwede Mantashe has urged South Africans not to panic about a possible fuel shortage, saying vessels carrying cargo and supplies destined for South Africa are passing through the Strait of Hormuz without interruption or threats of attack from Iran.
Mantashe was responding to questions in the National Assembly as South Africans remained deeply concerned about fuel shortages and a possible spike in fuel prices expected to take effect in the coming days.
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According to The Citizen, the United States and Israel's war in Iran has ignited global panic, with the conflict expected to severely impact fuel prices and supply.
During the National Assembly session, ANC MP Fasiha Hassan asked Mantashe whether South Africa's petroleum supply security arrangements were adequate to withstand sustained external supply disruptions resulting from the war.
What did Mantashe say about the country's fuel supply security?
Mantashe was resolute in his response, stating that there was no need for alarm.
"You will see that the question reflects panic. And as a mineworker, one thing I learnt early in life is that panic kills. Despite the heightened geopolitical risk, including the disruption to the Middle East shipping routes, the Republic's current petroleum supply security arrangement remains robust," he said.
He added that Iran's stated position should allay fears of immediate supply disruption, particularly for South Africa.
"I am sure if you monitor the news, you will appreciate that the Strait of Hormuz allows cargo that goes to South Africa without interruption. So that means we have a chance to maintain a stable supply for a long period of time. There should be no panic in South Africa; panic kills."
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What are Iran's requirements for ships passing through the Strait?
Mantashe outlined two requirements set by Iran for vessels wishing to pass through the Strait of Hormuz, noting that Pretoria was engaging BRICS partners about the current conflict.
"In the Strait of Hormuz, there is one requirement they want: you can go through if you are not a partner or in alliance with the US and Israel. If you are not in alliance with those, you are allowed through. The second requirement is that you will pay Iran in rial, not dollars."
He told members of Parliament that this was a political decision taken by Iran. "All cargo coming to South Africa is allowed through. There is no fear of this. Unless you want to identify yourself with [the US] and Israel," he said.
How much can South Africa do to shield itself from oil price shocks?
With petrol prices expected to be announced imminently, Mantashe acknowledged that South Africa had limited options when it came to managing oil price shocks.
"There are things we can do and things we can't do. If cargo cannot reach us from the Middle East, then come 1 April, you can expect a price increase."
He argued that the only long-term solution was for South Africa to develop its own petroleum resources.
"The only way is to drill, drill, drill and produce our own petroleum. If we don't do that, we will not overcome the risks of war. Every time we drill, we are taken to court. If we could have special courts dealing with those cases, it would go a long way to solving that problem. If we have our own sources of energy, we can mitigate," Mantashe said.
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What impact is the fuel crisis already having on South Africans?
South Africans are already feeling the effects of the looming price hikes. Residents in the Cape Peninsula are bearing the brunt, with reports of rationing at Garden Route service stations and delayed diesel deliveries raising concern, particularly within the agricultural sector at a critical time in the farming calendar.
In addition to diesel, input prices such as fertiliser are also rising due to the planned increases in fuel and diesel costs.
What do the latest fuel price forecasts show?
According to the Central Energy Fund's latest March data, petrol and diesel prices are showing massive under-recoveries due to the ongoing war in Iran. The data show that 93-octane petrol has an under-recovery of 507 cents per litre, while 95-octane petrol reflects an under-recovery of 562 cents per litre.
Motorists using diesel-powered vehicles face an even steeper increase, with diesel at 0.05% sulphur carrying an under-recovery of 937 cents per litre and diesel at 0.005% sulphur sitting at 950 cents per litre.
Should these figures remain unchanged, the following price increases are expected on 1 April: petrol 93 will rise by R5.07 per litre; petrol 95 by R5.62 per litre; diesel 0.05% by R9.37 per litre; diesel 0.005% by R9.50 per litre; and illuminating paraffin by R11.00 per litre.
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