Astron Energy, a subsidiary of global commodity trader Glencore, will invest up to six billion rand ($328 million) to upgrade its South African refinery and comply with the country’s cleaner fuel regulations before a 2027 deadline.
The investment will fund new equipment at the company’s 100,000 barrel per day crude oil refinery near Cape Town, including a Gasoline Hydrotreating Process designed to lower petrol sulphur levels to Euro 5 standards, company officials said on Wednesday.
South Africa’s Clean Fuels II regulations, which require sulphur levels in petrol and diesel to be reduced to 10 parts per million (ppm), were initially set to take effect in 2017 but were postponed to July 1, 2027.
Speaking during a visit to the refinery, Astron Energy Chief Executive Officer Thabiet Booley said the company was on track to meet the regulatory deadline.
“We will be supplying compliant fuels at the date asked of us,” Booley stated.
Astron Energy is one of only two crude oil refineries still operating in South Africa, following the closure and mothballing of the two largest crude processing plants in Durban.
As a result, the country’s refining capacity has dropped to around 358,000 barrels per day.
With domestic production reduced, Africa’s most industrialized economy now imports about 75% of its liquid fuel needs, estimated at over 19 billion litres in 2023, according to the industry body FIASA.
Meanwhile, South Africa’s reliance on fuel imports has raised concerns over supply stability.
The Strategic Fuel Fund, the state agency responsible for securing crude oil reserves, reported that the country currently holds less than 21 days of fuel reserves in case of a supply disruption.
To boost local refining capacity, the government recently acquired the 180,000 barrel per day Sapref refinery in Durban.
The facility, previously the country’s largest crude oil plant, was mothballed in 2022 and later severely damaged by floods.
Officials hope the investment in Astron Energy’s refinery, along with efforts to restore Sapref, will reduce reliance on imports and improve long term energy security.
