The National Council of Provinces select committee on economic development has urged the Treasury and the Cabinet to expedite planning for PetroSA's 10bn-dollar Mthombo crude oil refinery, which it says will address the problem of aging refineries and create jobs in the Eastern Cape.
SA imports about 7 percent of its refined fuel and is likely to face a shortfall of about 180,000 barrels a day of petrol and diesel by 2020.
The committee undertook a visit to the province earlier this year to probe issues related to the Coega industrial development zone (where the refinery will be located), the motor industry and Eskom's [Electricity Supply Commission] proposed building of another nuclear power station at Thyspunt.
In its report tabled in Parliament this week, the committee wrote that the planned 360,000 barrels-a-day refinery "seems to hang in limbo. Costs for the scoping and the environmental impact assessment are enormous and there is no further progress".
"The National Treasury must table a funding program to this committee linked to immediate timelines. The proposal to Cabinet must also be considered on an urgent basis," the report read.
The committee believes the proposed refinery will act as an economic catalyst for the Eastern Cape and would secure SA's future fuel requirements.
An estimated 27,500 temporary jobs would be created in the three- to-four-year construction period, and 18,500 direct and indirect permanent jobs would be created once it was operational.
"It is estimated that by 2015, SA will have to import about 8.5 billion liters of fuel per year (equivalent to 150,000 barrels per day) if there is no significant new investment in local refining capacity. Importing this much refined fuel will have a negative effect on the country's foreign exchange reserves, render national supply more vulnerable to external factors, and will not contribute to the creation of new jobs in the industry," the report said.
It noted the government's concern about SA's "considerable dependence" on international oil companies to secure future liquid fuels energy needs "as their global strategies are focused mainly on upstream activities, not new refining investment".
PetroSA insisted in a statement yesterday that its management and board remained committed to the project. "However, following comments and concerns raised by various stakeholders regarding the size of the project, we are currently reviewing (it), taking those inputs on board and will return to the board with a revised proposal."
Earlier this year, a Department of Energy official said that a 20-year infrastructure plan for liquid fuels, which the department would complete by December, would determine the appropriate size for Project Mthombo.
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