The cabinet has approved the implementation of the rollout strategy for liquefied petroleum gas (LPG), which seeks to expand the industry in the country.
SA uses relatively small amounts of LPG, which the rollout strategy is intended to address.
Making the announcement at a post-cabinet media briefing Thursday, minister in the presidency Mondli Gungubele said cabinet believed LPG would contribute meaningfully to the diversification of sources of energy.
“The strategy will, among other interventions, regulate the pricing in the value chain and support the manufacturing of LPG cylinders in the country,” Gungubele said. “It will also educate the public about the benefits of using LPG as an alternative form of energy.
The rollout strategy was released in March this year for public consultation.
In a recent article in Business Day, Monde Tyusha, the CEO of Sunrise Energy — which operates an LPG import facility at Saldanha Bay — noted that a draft rollout strategy released by mineral resources and energy minister Gwede Mantashe for public comment in April 2021, showed that SA consumed just more than 300,000 tonnes of LPG a year, with imports increasing due to the limited and decreasing ability of the local refineries to produce LPG.
“Though industry estimates using the latest data put the real annual consumption closer to 400,000 tonnes, this is still dismally low considering the continued growth in imports and the availability of LPG import capacity,” Tyusha said.
The draft LPG rollout strategy, he added, aimed to double SA’s LPG consumption within the next five years, which Tyusha said would require an additional 300,000 tonnes of LPG imports.
“In reality, according to economic advisory experts IHS Markit, we may not even hit this modest target by 2030 due to downstream infrastructure constraints and LPG pricing issues,” he wrote.
The final version of the strategy will, at some point, be published by the department of mineral resources and energy on its website.
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