South Africa’s Road Freight Association CEO Gavin Kelly has called for the revival and expansion of Sasol’s coal-to-liquids production to shield the country from escalating fuel prices triggered by the ongoing conflict in the Middle East involving Iran.
In a recent interview, Kelly highlighted South Africa’s heavy reliance on imported crude oil and refined petroleum products, especially with several local refineries closed, leaving the nation exposed to global oil price fluctuations, geopolitical tensions, and rand volatility. He noted that crude oil prices have surged to around $103 per barrel amid the crisis, which includes disruptions potentially affecting key shipping routes like the Strait of Hormuz.
Kelly emphasized that South Africa possesses significant domestic resources to reduce this vulnerability. He pointed to Sasol—originally developed during the 1970s and 1980s to produce synthetic fuel from coal—as a key existing asset. Sasol, an acronym for “fuel from coal” in Afrikaans (often referred to as “Ceil” in the discussion), continues to operate, though not at full potential for fuel production. With abundant coal reserves, Kelly argued that expanding Sasol could provide a reliable domestic fuel supply, particularly as coal use in power stations might decrease.
He also proposed leveraging South Africa’s vast sugarcane fields, particularly in KwaZulu-Natal and Mpumalanga, to produce ethanol for blending into fuels. This could support the struggling sugar industry, create jobs, and build long-term self-reliance, drawing on historical precedents like the “Union Spirits” product developed from sugarcane in the 1940s.
Kelly explained that South Africa shifted away from heavy investment in such technologies in recent decades due to lower global oil prices, the discovery of offshore oil and gas reserves, and the lifting of international embargoes after the transition to democracy, making imported oil more economically viable. However, current events demonstrate the risks of depending on international markets.
While acknowledging the promise of emerging alternatives like electric vehicles, solar energy, and hydrogen, Kelly cautioned that these technologies remain expensive, immature, and require extensive infrastructure development—such as widespread charging stations—and retraining in vehicle maintenance. Small transport operators, in particular, face challenges affording these shifts, and the country remains geared toward internal combustion engines in the short to medium term.
Addressing immediate impacts, Kelly warned that rising fuel costs will force road freight transporters to increase rates or absorb losses, leading to higher prices for goods and services for consumers. This could result in significant economic shocks through September and beyond, with ripple effects on inflation and living costs.
He suggested short-term government measures to cushion the blow, including temporarily suspending or reducing the fuel levy (though this would impact government revenue), releasing portions of strategic oil reserves (primarily reserved for military, police, and health services), or implementing consumption-reducing regulations such as lower speed limits or restricted fuel station hours, as seen during past oil crises in the 1970s.
Kelly stressed the need to avoid panic buying, which could exacerbate shortages, and urged intra-African cooperation, such as sourcing oil more affordably from producers like Nigeria or collaborating on Sasol-style projects with regional partners for funding, skills, and technology transfer. He questioned national spending priorities, suggesting resources might be better directed toward energy security rather than projects like high-speed rail.
The call comes as South Africa grapples with limited refining capacity—relying on facilities like NATREF, Astron Energy, and Sasol’s Secunda coal-to-liquids plant—amid global market pressures from the conflict. Kelly urged both government and private sector action to invest in these alternatives for greater resilience against international supply disruptions.