In a significant move to ensure national energy security and unlock investment, the South African government has granted long-term leases to international oil companies and traders at the country's primary fuel import hub in Durban.
The decision, confirmed by the Fuels Industry Association of South Africa (Fiasa), ends years of uncertainty caused by short-term rental agreements at the critical Island View Precinct. The facility handles approximately 70% of the nation's fuel imports, serving as its most vital storage and supply hub.
Transport Minister Barbara Creecy invoked Section 79 of the National Ports Authority Act to extend the lease agreements. This provision allows the minister to bypass standard procedures when an action is deemed to be in the national interest.
"The Section 79 letter was issued to our members... It is in our favour. Remember we wanted a long-term tenure, so we got that," said Fani Tshifularo, chief executive of Fiasa.
The ruling directly benefits major industry players, including BP and the global energy trader Vitol. A BP spokesperson confirmed the approval applies to Sapref Pty Ltd, a entity it jointly owns with Shell.
Conditional approval
Sapref has focused on fuel imports since shuttering its refinery operations in 2022 and later selling the plant.
Engen, in which Vitol holds a majority stake, acknowledged the minister's conditional approval but did not provide further details.
According to Tshifularo, the ministerial decision paves the way for formal 25-year lease negotiations to commence between the oil companies and the Transnet National Ports Authority (TNPA).
The transport ministry declined to share specifics of the directive, stating a formal announcement would be made in due course. Transnet indicated it would respond to queries on Tuesday.
The ruling also raises questions about the government's parallel plans for the Sapref refinery site. The state-owned Central Energy Fund (CEF), which purchased the idled plant, did not respond to inquiries.
It remains unclear how the long-term leases for import infrastructure might affect CEF's ambitions to revive the flood-damaged refinery and expand its oil trading division through its subsidiary, SANPC.
