South Africa oil import portfolio risks: which way out?

Abstract

A major consequence of South Africa's strong economic growth since the democratic dispensation of 1994 is the rapid increase in domestic demand for oil energy. Growth in total oil consumption has averaged almost 2% per annum due to expansions in the transportation and mining sectors. With small amounts of proven oil reserves, the rise in oil demand as an energy source has resulted in South Africa's growing dependence on external sources for its domestic crude oil needs amid substantial increases in world oil prices to unprecedented levels. Besides having huge impacts on economic growth and welfare, high oil prices are likely to lower consumption in favour of other sources of energy, such as coal, which are known to be more damaging for the environment.