CAPE TOWN: South Africa will wait for global oil prices to rise to around $100 a barrel before selling more of its strategic crude reserves, a senior energy official told Reuters.
The country has been looking to sell crude since 2022, when the government cushioned consumers from high petrol and diesel prices by temporarily cutting a fuel levy on the condition that the revenue would be recouped by selling oil from the strategic reserves. Brent crude averaged $99 a barrel that year.
Global crude prices have taken a hammering in recent weeks, hurt by worries that U.S. President Donald Trump’s trade war could push economies around the world into recession. Brent was trading around $66 a barrel on Wednesday.
“The oil price is too low, so if you sell today you are going to empty the tanks. So we have to sell at the right level to make sure we still have strategic stocks,” Godfrey Moagi, CEO of the state-owned South African National Petroleum Company, told Reuters.
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“We are looking to sell at around $100 a barrel,” he said.
South Africa’s National Treasury is expecting to receive 4 billion rand ($223.2 million) from the sale of more crude oil from the country’s strategic reserves in the fiscal year that ends in March 2026, but Moagi’s comments suggest that may not happen unless global oil prices rally.
Following the levy cut in 2022, 2 billion rand was transferred to the government in the 2023/24 fiscal year, which was when Brent futures last traded close to $100 a barrel.
South Africa’s current strategic crude reserves are estimated at roughly 7.7 million barrels. Since 2022, 2 million barrels have been sold to local petrochemical firm Sasol and another 280,000 barrels to the local unit of France’s TotalEnergies, Moagi said.
The strategic reserves are held by the Strategic Fuel Fund Association, a ring-fenced unit of the company Moagi leads.
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