Sasol has revised its full-year fuel sales volumes upwards amid higher Natref volumes and increased demand against the backdrop of an uncertain Middle East environment.
The group said in an operational update on Thursday it was keeping its 2026 financial year guidance unchanged, except for gas production, which it revised downwards, and fuel sales volumes, which it revised upwards to 10%-15% higher than a year ago from 5%-10% previously.
Gas production volumes are expected to be 5% to 10% below the 2025 financial year’s levels due to flooding in Mozambique and well availability constraints at the Petroleum Production Agreement (PPA) asset.
Sasol’s capital expenditure has been revised downwards to R20bn-R22bn from R22bn-R24bn before, supported by ongoing capital optimisation and the deferral of non-critical shutdowns.
The conflict in the Middle East has highlighted Sasol’s role in the domestic supply of energy and chemical products, and its role in delivering these was reinforced during this quarter after the closure of the Strait of Hormuz.
“Our response has been focused on sustaining uninterrupted operations and leveraging our integrated value chain to ensure consistent supply of products to our customers while maintaining discipline on cost and capital spend,” it said.
It added that working capital has increased since the Middle East conflict and prudent working capital management remains a key focus area for the business for the remainder of this financial year.
Releasing its business performance metrics for the nine months to end-March, Sasol said that in the Southern Africa business, the destoning plant continued to deliver improved coal quality, with average sinks in line with expectations and higher coal production reducing external coal purchases.
In the mining division, saleable production for the third quarter increased by 3% from the previous quarter, but year to date is 5% lower due to higher discards resulting from the destoning process and low-quality sections that were temporarily closed during the first half.
External purchases in the third quarter were 18% lower than the previous quarter due to improved own production.
Country-wide flooding in Mozambique affected condensate logistics and transportation and necessitated reducing gas production. As a result, force majeure was declared at the end of January, which mainly affected gas supplied to Sasol’s operations while customer demand was met.
Together with PPA well availability constraints, this resulted in a 10% decrease in gas production compared with the previous quarter. The force majeure was lifted in mid-February. Year-to-date production is 7% lower than the prior period.
Secunda Operations (SO) production benefited from improved coal quality and gasifier availability despite plant outages in the third quarter, and was 8% higher than the previous year.
Natref increased production during the quarter, supported by strong market demand linked to energy security concerns. Production rose 4% in the quarter, primarily driven by higher crude oil throughput, supported by secured market demand. Year to date, production is 68% higher.
“Despite the Middle East conflict constraining sour crude supply, Sasol mitigated this through sourcing sour crude from other regions, resulting in continued strong sales volumes for the quarter,” it said.
Oryx GTL production was significantly lower after the shutdown of the plant due to gas supply disruption in early March, with the timing of a restart remaining uncertain.
SO’s production was down by 7% in the third quarter compared with the previous quarter, mainly due to plant outages and reduced natural gas supply from Mozambique, which was partially offset by the improved coal quality. For the first nine months, production was 8% higher year on year.
After the escalation of the Middle Eastern conflict at the end of February, mitigating actions were implemented to ensure the consistent supply of crude oil to enable continuous operations at Natref and maintain reliable fuel supply in South Africa, including jet fuel to OR Tambo International Airport.
Oryx GTL production in the third quarter was 50% lower than the previous quarter due to unplanned outages in the first half and the shutdown of the facility at the beginning of March.
The plant was safely shut down following the escalation of the Middle East conflict, which led to QatarEnergy stopping gas supply.
Revenue for Chemicals Africa increased compared to the previous quarter, driven by higher volumes and prices.
In the International Chemicals business, the US operations benefited from more favourable pricing and improved production performance. In Eurasia, sales were higher due to tightened global supply, but higher input costs and feedstock constraints affected production, resulting in the force majeure on certain products.
“While tight supply is supporting current demand, we remain cautious on the medium-term outlook, focusing on managing input cost pressures to support margins and optimising production across our value chains,” Sasol said.
The group said it will continue to actively manage its exposure to oil price and currency volatility through its hedging programme.
“During the quarter, we completed our [2027 financial year] oil hedging programme, securing downside protection while retaining upside participation. The [rand-dollar] hedging programme for [the 2027 financial year] is still under way,” it said.
Business Day
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