Transitioning SA's Petrochemical Value Chain

A project of the apartheid regime, Sasol was initially a state-owned oil company, afforded state support to ensure security of liquid fuel supply. Both Secunda and Sasolburg are listed as National Key Points. Sasol listed on the Johannesburg stock exchange in 1979, but has continued to enjoy significant state support and protection both until the democratic transition, and beyond through import parity pricing on petrol, subsidised state financing, protection from competition and state investment in supportive infrastructure such as the Mozambican gas pipeline.

Sasol is central to the minerals and energy complex that has structured South Africa’s political economy – where cheap  labour enabled cheap coal, which in turn drove an energy intensive capital structure. Together with Eskom, Sasol has been described as a duopoly in the political economy of energy supply.

The South African minerals and energy political economy has been characterised by powerful incumbents controlling information flows and discourse to ensure a supportive political and policy environment (Source: Civil Society Engagement). As the country’s largest corporate taxpayer, supplier of strategic products and a significant employer, Sasol retains a strong lobbying influence over government, including in areas relating to decarbonisation, such as the carbon tax.

A history of delay by large emitters such as Sasol and Eskom in responding to environmental policy and legislation has eroded trust between industry players and society (Source: Grassroots Engagement).

The political economy has also played a role in shaping the value chains that are linked to the facilities that sit as the focus of this study. A wide literature exists that describes how lock-in to certain energy carriers, market dominance of transport technologies, evolution of spatial planning in cities (and notably under the apartheid regime), evolution of certain industrial sectors, and dominance of particular agricultural products and suppliers all have a political economy narrative in their histories.