Petrol and diesel consumption in South Africa has declined by 5.8-billion litres since 2015, shedding billions of rand in lost revenue and putting pressure on the country’s more than 4,600 garage forecourts to stay afloat.
The plunge in consumption was worsened by the outbreak of Covid-19 in 2020, which saw companies adopt hybrid work models.
Data from the energy department show that petrol consumption, which peaked at 12-billion litres in 2015, plunged to 8.7-billion by 2024, while diesel consumption declined from 14-billion to 11.8-billion.
While people are going back to the office this is not at the same levels as in 2019. Petrol sales are down 3.3-billion from the numbers reported in 2015 while diesel volumes are 2.4-billion litres lower, with the latter somewhat shielded by Eskom purchases.
However, energy majors BP and Sasol said Eskom’s purchase of diesel for its open cycle gas turbines (OCGTs) is likely to decline as the grid becomes more stable.
The companies said their storage facility in Pretoria has seen volumes decline 30% since 2020, asking for a 105% tariff for its petroleum storage facility in Pretoria for the 2026 financial year.
The joint venture, in its application to the National Energy Regulator of South Africa (Nersa), said that the reduction in demand from the last approved tariff in 2017 to the present application has influenced the tariff increase being asked for.
“In 2020, Covid had the biggest impact on demand in the country and though in the subsequent years we have seen some recovery it has not been to the pre-Covid levels,” the application reads.
Petrol vs diesel
“Petrol, mainly fuelling mobility, has, as a result of the post-Covid change in mobility patterns due to hybrid-remote working and higher fuel prices triggered by conflict and interest rate increases impacting disposable income, had a significant effect on demand destruction.
“Diesel has been relatively stable with no significant disruptions in demand, but this is largely attributed to the Eskom issue and usage of this fuel as backup generation by industries, small businesses and households. This will normalise as it continues to stabilise over time.”
Eskom on Monday said savings from diesel usage in the 2025 financial year were about R16bn and continue to decrease in this financial year due to the reliability of the coal fleet increasing, enabling the safe reduction in the use of OCGTs.
The OCGTs play a vital role in providing emergency support during periods of supply shortage.
British multinational oil and gas company Shell in 2024 announced plans to exit its downstream business in South Africa, which houses more than 600 service stations countrywide.
Shell is yet to announce if it has found a buyer for the asset. While demand for petrol and diesel has declined consumption of paraffin has more than doubled since 2015.
Sasol has previously reported a rise in paraffin imports where people spike diesel with paraffin, putting pressure on the supply and demand balance in the market.
Reports emerged in 2024 that some fuel stations in South Africa were selling diesel adulterated with paraffin, which affects the lubricity of diesel and does not contain the necessary additives required by modern engines. Repeated use of the tainted fuel can lead to engine failure.
The South African Revenue Service and its sister law enforcement agencies have raided the illicit fuel industry, which siphons nearly R4bn from the fiscus on an annual basis.
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