South Africa’s oil importation bill could have been $4.7 billion lower if it had not closed a number of refineries, the country’s central bank said. Refining capacity in Africa’s largest economy has halved over the past decade and imported refined fuel now supplies more than half of domestic demand, the South African Reserve Bank said in a note published last week. The country recently announced plans to at least triple its oil refining capacity amid growing concerns around its exposure to global price shocks.
Disruption caused by the Iran war has pushed up oil prices and exposed Africa’s reliance on energy imports which account for around 70% of the continent’s refined fuel needs. The conflict has prompted several nations to look at ways to reassess their energy sovereignty. Nigerian tycoon Aliko Dangote plans to build a refinery in Kenya modeled on his Lagos mega-refinery.