South Africa’s petroleum storage and import sector has reached a critical crossroads. At the centre of the debate is the Island View Terminal (IVT), the country’s largest and most strategic fuel storage hub. What should have been an opportunity to reset the sector in line with transformation, competition and national interest now risks entrenching exclusion for another generation.
The recent approval of 25-year lease renewals for multinational oil majors, granted through a Section 79 Directive by the Minister of Transport, has triggered deep concern among Black Economic Empowerement companies. The fear is simple but profound: a state-owned strategic asset is being locked into arrangements that could extend incumbent control to an extraordinary 91 years.
The Section 79 Directive extends the oil majors’ presence at IVT to 91 years:
- 1959–1984 — First 25-year lease
- 1984–2009 — Second 25-year renewal
- 2009–2020 — Short-term, month-to-month extensions (11 years)
- 2021–2046 — Section 79: new 25-year directive
Critics argue that this entrenched cycle of uninterrupted control is fundamentally inconsistent with South Africa’s transformation, competition, and equity goals.
In addition, the Economic Transformation Companies state that they have evidence of how previous attempts to utilize the uncommitted capacity mechanism at IVT Facilities have been frustrated by the Oil Companies.
The issue is not merely legal or procedural. It is fundamentally about who gets access to South Africa’s energy infrastructure and who is locked out. By opting for a Section 79 Directive, rather than a transparent and competitive allocation process, the state has effectively renewed long-term leases without guaranteeing meaningful participation for new and emerging Black-owned operators. While the directive includes a 15% allocation to the Central Energy Fund and references to “future access measures”, these provisions are vague, unenforceable and dependent on later administrative discretion.
More than 50 economic transformation companies, including licensed petroleum wholesalers, report that they were excluded from the renewal process altogether. They argue that BEE partnerships with incumbents do not amount to genuine transformation when operational control, storage access and logistics remain firmly in the hands of oil majors operating within a state facility. For many Black-owned operators, access to IVT has remained structurally blocked despite repeated engagements over the years.
What makes this moment particularly troubling is the historical context. Since 1959, IVT has effectively remained under uninterrupted control by the same players through successive 25-year leases, short-term extensions and now another long-term directive. This cycle is difficult to reconcile with South Africa’s stated commitment to transformation, competition and inclusive growth.
Parliament has rightly stepped in. Portfolio Committees on Transport and the DTIC convened mediation sessions in late 2025, during which the Minister outlined possible future access mechanisms such as third-party access, aggregator models and the allocation of uncommitted capacity.
While these ideas sound reasonable in principle, transformation stakeholders remain unconvinced. Past experience, they argue, shows that uncommitted capacity mechanisms have been frustrated in practice, leaving Black operators sidelined. In the last Parliamentary Facilitation session on 28 November 2025, the Oil Majors and their Association, Fuel Industry Association, South Africa (FAISA) categorically stated that there is no uncommitted capacity. This means even when DoT Minister is pinning her hopes to accommodate economic transformation entities on the uncommitted capacity that noble plan will not work because there is no uncommitted capacity.
The urgency is heightened by the imminent drafting of Terminal Operator Agreements by Transnet National Ports Authority. Once signed, these agreements will legally lock in the current operational arrangements for the full 25-year term, making future reform extremely difficult, if not impossible.
Two clear remedies have been placed on the table. The first is to amend the Section 79 Directive to guarantee at least 25% of IVT capacity for economic transformation entities and strategic state users such as the Department of Defence. The second is to suspend the directive altogether and restart the process under a transparent, competitive and inclusive framework appropriate for a state-owned strategic asset.
Transformation cannot be deferred to uncertain future processes, nor can it depend on the goodwill of incumbents. Long-term national fuel security, competition and economic inclusion require decisive action now.
The Minister of Transport has an opportunity to correct course and demonstrate that transformation is not a slogan but a lived policy choice. Failure to act risks locking South Africa into decades of exclusion at one of its most critical energy assets.
What gives hope in this debate is the Minister of Transport’s commitment to continued engagement with transformation stakeholders. The Minister has undertaken to meet with the Energy Producers and Traders Collective (EPTC) Association with a view to allocating its requested 25% capacity directly into the Section 79 Directive, to be implemented through Transnet National Ports Authority Terminal Operator Agreements. This signals an acknowledgement that transformation cannot be postponed or left to uncertain future mechanisms. If formalised and legally enforceable, this step could balance operational stability with meaningful inclusion, strengthen national fuel security, and demonstrate that strategic state assets can support both growth and genuine economic transformation.
Authored by Zakhele Madela
Chairperson, Energy Producers and Traders Collective (EPTC) Association
Chairperson, Economic Intervention Forum South Africa (EIFSA)