Department of Mineral Resources and Energy drafts new Petroleum Products Bill

The draft bill aims to repeal and replace the Petroleum Products Act of 1977, and is open for public comment until the 2oth of December.

South Africa’s Department of Mineral Resources and Energy (DMRE) has published a draft Petroleum Products Bill with aims to streamline the licensing and appeals process in the country’s petroleum industry.

South Africa’s draft Petroleum Products Bill aims to overhaul the regulatory landscape of the downstream petroleum industry, seeking to bolster the nation’s energy security and diversify its energy sources. The legislation, released on October 21st in the Government Gazette, proposes new licensing and regulatory mechanisms intended to make the sector more investor-friendly and compliant with international standards.

A Cabinet statement describes the Bill as pivotal for advancing cleaner, modern energy products, introducing renewable components, and aligning with environmental imperatives. The draft legislation would replace the outdated Petroleum Products Amendment Act of 2003, paving the way for a sector that is both economically transformative and environmentally sustainable. The Bill includes provisions for economic empowerment, proposing that current Black Economic Empowerment (B-BBEE) requirements remain unchanged for now, but allowing the Minister to mandate that specific licenses go to majority black-owned enterprises in future.

Key environmental stipulations would also compel companies to adopt practices that minimize ecological harm, with a strong focus on liquefied petroleum gas (LPG). New licensing standards for LPG products such as butane and propane are designed to enhance the sector’s sustainability. Stricter controls are set to govern the handling, storage, and distribution of LPG, with companies required to adopt measures that reduce emissions and safeguard against leaks. South Africa’s LPG industry, spurred by rising energy prices and new distribution hubs, is poised for significant growth.

The draft legislation also signals support for the consolidation of state assets under a new National Petroleum Company (SANPC). By merging the Central Energy Fund, PetroSA, iGas, and the Strategic Fuel Fund (SFF), the SANPC is expected to improve operational efficiency and project oversight across South Africa’s petroleum sector, potentially streamlining the management of the country’s petroleum resources.

While the Bill is designed to appeal to investors through clearer regulatory pathways, the extent to which stakeholders can practically implement these reforms remains uncertain. Public comments on the Bill are invited until December 20th.

‍