KEY POINTS
- South Africa grants long-term leases to oil majors at Durban fuel hub.
- About 70 percent of national fuel imports flow through Island View.
- Industry welcomes lease stability after years of short-term contracts.
South Africa has granted oil majors and global traders long-term access to the Island View Precinct in Durban, the country’s most critical fuel import hub. The move ends years of temporary lease arrangements that had cast doubt over investments and supply security at the site.
Transport Minister Barbara Creecy confirmed the decision after receiving a formal request from the Fuels Industry Association of South Africa. Using Section 79 of the National Ports Authority Act, Creecy invoked special powers to override the usual bureaucratic process, saying the leases were extended in the national interest.
Industry players described the ruling as a breakthrough. “The Section 79 letter was issued to our members. It is in our favour. We wanted long-term tenure, so we got that,” said Fani Tshifularo, chief executive of the Fuels Industry Association.
Oil majors gain long-term tenure
About 70 percent of South Africa’s fuel imports pass through the Island View Precinct, which sits inside Durban’s port and functions as the country’s main storage and distribution hub. The decision grants stability for companies like BP, Shell, and Vitol, which had been operating under stopgap leases while pressing the government for longer commitments.
BP confirmed that approval was issued to Sapref Pty Ltd, its joint venture with Shell. Since 2022, the company has focused on imports through the Island View marine terminal after shuttering its refinery business and later selling the plant to state-owned Central Energy Fund.
Engen, majority-owned by Vitol, acknowledged the minister’s approval but noted that conditions were attached without offering specifics. Tshifularo added that negotiations for 25-year leases with Transnet National Ports Authority will begin shortly.
According to Reuters, the Central Energy Fund, meanwhile, has applied separately for Section 79 approval to support its ambitions of reviving the flood-damaged Sapref refinery and expanding its oil trading arm. Government officials said further details would be disclosed in due course.
