Petroleum is one of the biggest industries in our country, accounting for an estimated 8,5% of its GDP, and its recent growth has been phenomenal, with both net income and total assets more than doubling in the past 10 years. But it’s now under pressure to make drastic changes.
The first of these is gender and racial transformation, creating more space for non-whites and women in a sector that’s still dominated by white men more than 20 years after SA achieved democracy. The second is the move to cleaner fuels, as the world becomes increasingly conscious of petrol’s role in climate change and holds the industry more environmentally accountable.
Effecting these two changes is basically a matter of empowerment and investment. With the right implementation and the support of government, they can be achieved without too much upheaval. However, countering the threat posed by evolving automobile technology will challenge the industry to its very core.
Only a few years ago, the concept of electric cars seemed like a science fiction fantasy – yet today, it’s all too real. The technology is evolving at breakneck speed, governments in the Western world are embracing it and car manufacturers are investing heavily in these vehicles that could render petroleum obsolete within our lifetimes. SA’s petrol industry will have to come up with viable ways of surviving and continuing to fuel Africa’s most industrialised economy.
TOO BIG TO FAIL?
The SA Petroleum Industry Association (Sapia) represents the collective interests of the sector. It has 23 members, including SA’s seven major oil companies: Sasol, BP, Chevron, Engen, Shell, Total and PetroSA.
“Our members have more than 90% market share and produce 100% of the petroleum products in the country,” says Avhapfani Tshifularo, Sapia’s Executive Director. “Members have a capital budget of roughly R6,5 billion, 60% of which is spent on refineries, 30% on depots and 10% on maintenance work.”
According to a 2016 study, The Petroleum Industry’s Contribution to SA, compiled by KPMG, the petrol industry contributes 8% to SA’s GDP, which translates to more than R300 billion. The petrol companies also create direct and indirect employment of 750 000 people, which represents 5% of the country’s jobs.