BP bets on stronger SA growth and consumer spending to drive fuel sales

BP expects accelerating economic growth and stronger consumer spending in South Africa to underpin robust growth in fuel sales, supported by easing inflation, lower interest rates and improving household finances.

Over the past two years, BP has added about 25 fuel stations to its network. This year, the fuels company plans to open more sites as it continues with its multi-year site transformation programme.

In an important effort, the energy company has revealed that it will also be undertaking steps towards its commitments to cleaner fuels and to extending its bPOWERd low-carbon battery rental offering at more sites in SA while retaining its collaboration with Castrol in the area of lubricants.

“We are not looking to return to business as usual, we are looking to ignite a future of shared innovation and mutual success. What we do matters more than ever as energy demand grows and changes,” said BP Southern Africa CEO, Taelo Mojapelo on Monday.

This comes at a time South Africa’s economic growth has picked up pace amid high expectations from the business sector that the the government will speed up the implementation of reforms to fix logistics and utilities, such as rail and port inefficiencies, as well as higher electricity tariffs choking local manufacturers and miners.

Nicky Weimar, Nedbank chief economist, said during a recent event hosted by BP that South Africa’s economic growth in the first three quarters of 2025 was almost double that of the same period in 2024.

“Growth is mainly being driven by consumer spending – which is good news for the fuel retail industry,” said Weimar.

Nonetheless, geopolitical pressures, tariff and trade wars among international trade partners that include crucial suppliers and supply routes for oil remain.

Positively though, the South African government of national unity (GNU) is pursuing structural reforms related to inflation targeting that could translate to robust growth in real disposable incomes.

There are high expectations that disposable incomes will grow faster than inflation, more so on the backdrop of interest rate cuts, allowable withdrawals from the two-pot pension system, and a stronger rand.

Deputy Minister of Mineral and Petroleum Resources, Phumzile Mgcina, who attended the BP SA conference said the GNU was alive to the real pressures confronting the fuel industry, and was committed to accelerating investment and protecting the environment.

She highlighted initiatives where government is working with the private sector, including on local refining capacity.

“We remain steadfast in our determination to grow and transform the fuel sector and ensure that it maintains its rightful place in SA’s development trajectory,” she said.

Big issues are however confronting the fuel industry at large, with Nokwanda Khumalo, BP SA’s General Manager for Mobility and Convenience, outlining the formidable challenges that face the global oil industry, including predictions that demand for fossil fuels will decline by 2050.

However, with the administration of US President Donald Trump adopting a positive view on the continued use of fossil fuels, these commodities are expected to continue to play a major role in energy systems.

For its part BP SA is transforming its business by implementing an integrated product and supply operating model, and to increase its share in the business to business space in South Africa.

“We have a clear destination, and we intend to partner deeply and meaningfully with our network,” Khumalo said.

BUSINESS REPORT