Potential gas supply shortage looms amidst withdrawal of Vita Gas and increased demand

Rumours of a potential gas supply shortage have been making headlines over the past week, and there seem to be several reasons that could lead to a scarcity of liquified petroleum gas (LPG).

One of the reasons is the withdrawal of Vita Gas, a subsidiary of the Dutch commodity trading giant Vita Gas, from its contractual arrangement with Sunrise Energy. This has left the import terminal facility scrambling to secure a new supply of liquefied petroleum gas (LPG) for the Western Cape region.

The CEO of Sunrise Energy stated in an interview on Cape Radio, “We have had to find an alternative supplier to fill that gap in an emergency situation. To mitigate the shortfall, we have reached out to other suppliers who have come to our rescue.” Natref and Sasol Secunda are among the refineries in South Africa. Unfortunately, a number of older refineries have shut down in recent years due to the new pollution legislation, as compliance would have required costly capital investments.

Furthermore, the increased demand for LPG caused by loadshedding has resulted in a nationwide shortage of gas cylinders, as many households have turned to gas heating and cooking equipment.

Currently, there doesn’t appear to be a shortage of LPG. However, it remains uncertain whether a shortage might occur in the near future.

FEDHASA will closely monitor the situation in the coming days and provide updates to our members as necessary.

Additional reading:

Cape Talk: WC gas shortage (seemingly) averted, despite importer terminating its contract

IOL: LPG shortage likely to lead to R4.50/kg gas price hike

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