With petrol prices increasing rapidly due to the Middle East Tension Localisation Support Fund (LSF) presented new research on Wednesday into the development of a sorghum biofuel value chain in South Africa.
Image: Supplied by LSF
New research presented by the Localisation Support Fund (LSF) has highlighted sorghum-based biofuels as a potential solution to South Africa’s growing fuel vulnerability amid rising petrol prices linked to escalating Middle East Tension.
Speaking at the presentation on Wednesday, Josie Rowe-Setz from Blueprint Holdings said South Africa’s increasing dependence on imported refined fuel has left the country highly exposed to global oil price volatility and geopolitical instability.
“A number of the country's last major coastal oil refineries closed in 2022 and 2023. South Africa now imports approximately 75% of its liquid fuel requirements in already-refined form - a fundamental shift from refiner to refined product importer that has deepened the country's exposure to global supply chains, Gulf region geopolitics, and the volatility of the rand-dollar exchange rate,” she said.
According to the research, petrol prices have surged dramatically over the past decade, with the coastal price of 95 Unleaded Petrol climbing from about R10.83 per litre in January 2015 to a peak of R26.09 per litre in July 2022 before stabilising between R20 and R22 per litre through 2025 and into 2026.
“Every South African household and business has felt the consequences of that exposure. There is no indication that the structural vulnerability driving it is diminishing,” Rowe-Setz said.
The study argues that South Africa possesses several advantages that could support a domestic biofuels industry, including extensive agricultural land, an established agro-processing sector and the long-standing cultivation of sorghum across the continent.
Rowe-Setz said sorghum-based ethanol production was technically feasible and nearing commercial viability.
Under the model used in the study — based on an exchange rate of R16.50 to the dollar, Brent crude oil at $80 per barrel and a 15% cost of capital — grain sorghum ethanol production falls short of breakeven by only R0.82 per litre.
She noted that a modest 1.5% improvement in average dryland sorghum yields would eliminate the shortfall.
“Grain sorghum is not merely close to being viable. It is the best-performing feedstock of the six configurations that the model assesses,” she said.
“Sweet sorghum runs a deficit of R6.09 per litre. A new-build sugar plant runs at R1.63 per litre in deficit. A converted sugar plant runs R3.22 per litre. Off-specification maize runs R2.92 per litre. Grain sorghum, at R0.82 per litre, stands apart from all of them.”
Rowe-Setz said South Africa’s total dependence on imported crude oil remains a structural weakness.
“Every barrel of crude oil that feeds the country's refineries is imported, principally from the Middle East and the Rest of Africa. This has been true since the industry's beginnings, and it is the foundational reality that has shaped the liquid fuels economy since its inception,” she said.
“It determines the price motorists pay at the pump, the foreign exchange the country must spend to secure supply, and the strategic exposure the government must manage.”
The research also pointed to the rapid growth of the global bioethanol market, dominated by countries such as the United States and Brazil, which together account for more than 80% of global production.
The United States produces roughly 55 billion litres annually, mainly from maize, while Brazil produces around 35 billion litres from sugarcane.
Rowe-Setz said that the case for biofuels rests on several overlapping rationales, which apply with varying degrees of force in different national contexts.
“Energy security is the most immediate driver for many countries. Nations that import petroleum face exposure to global price shocks and supply disruptions,” she said.
“Replacing even a fraction of imported fuel with domestically produced biofuel reduces this exposure and retains spending within the local economy. For South Africa, where fuel imports represent a significant drain on foreign exchange, this argument is compelling.”
The report also identified land availability as a critical factor in South Africa’s biofuel prospects.
Citing research by the Bureau for Food and Agricultural Policy (BFAP), Rowe-Setz said only 9.3% of South Africa’s land is classified as high agricultural potential, with most of that concentrated in Mpumalanga, KwaZulu-Natal and Limpopo.
The findings come as South Africa faces renewed pressure from rising global oil prices and concerns over long-term fuel security.
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