South Africa has granted multinational oil majors and traders, including BP and Vitol, extended access to its main petrochemical hub in Durban, resolving years of disputes over short-term leases that had jeopardized investment and supply security.
The long-term lease approvals at Durban’s Island View hub have given BP and Shell, both headquartered in London, along with Geneva-based Vitol, a stronger hold over South Africa’s fuel supply.
The Transport Ministry announced the decision, which highlights the enduring dominance of foreign firms in Africa’s downstream oil sector, an arrangement that offers immediate stability but also entrenches long-term dependency risks.
Around 70% of South Africa’s fuel imports move through the Island View Precinct at Durban port, the country’s largest storage and supply hub. The leases were secured under Section 79 of the National Ports Authority Act, allowing Minister Barbara Creecy to bypass bureaucratic delays in what she described as the “national interest,” Reuters reported.
For the industry, the outcome is a victory. “This is in our favour. Remember we wanted a long-term tenure, so we got that,” said Fani Tshifularo, CEO of the Fuels Industry Association of South Africa.
But others view the arrangement differently. The fact that BP, Shell, and Vitol, companies headquartered far from Africa, control such a critical part of South Africa’s energy supply underscores what critics see as a structural weakness.
Their influence has grown since BP and Shell closed the Sapref refinery in 2022, later selling it to the state-owned Central Energy Fund and shifting entirely to imports.
While Pretoria has delivered investment certainty with these leases, analysts warn that the move deepens reliance on firms located thousands of miles away.
The situation reflects what many describe as Africa’s paradox, the continent is rich in crude oil but heavily dependent on foreign refiners and trading houses for finished fuels.
Don’t Miss This:
Nigeria Signs Deepwater Oil Contract With TotalEnergies
The imbalance is not limited to South Africa. Across countries like Nigeria and Angola, chronic underinvestment in refining has left markets at the mercy of international oil majors and traders.
While such dominance secures Africa’s integration into global supply chains, it also exposes governments to price shocks and decisions made abroad.
Trade data this year highlight the trend. Consultancy CITAC reported that South Africa surpassed Nigeria as Africa’s largest petrol importer in the first quarter of 2025.
Nigeria’s imports dropped to 3.1 million tonnes thanks to the ramp-up of the Dangote Refinery, while South Africa imported 4.2 million tonnes during the same period.
For South Africa, the lease extensions bring short-term stability and reassurance for investors. They signal Pretoria’s willingness to guarantee access for global energy companies and reduce regulatory uncertainty amid volatile trade conditions.
But analysts warn that the long-term cost may be deeper dependence. Without major state or private investment in refining and distribution, South Africa, and Africa more broadly, risks surrendering strategic control of its energy future.
Energy consultancy CITAC has already cautioned that South Africa’s increasing reliance on imports leaves it highly vulnerable to shifts in global markets.
With domestic refining capacity more than halved in recent years, the country’s reliance on trading houses and foreign oil majors is only expected to intensify unless significant local investment emerges.
Don’t Miss This:
Kenya To Launch First Oil Licensing Round In Six Years With 10 Blocks On Offer
Image Credit: Business Insider Africa
