June 15, 2012 (TSR) – The U. S.-imposed sanctions against Iran over its nuclear program are going to impact the South African economy by disrupting its fuel supplies, a senior official said here on Friday.
“The sanctions are not just going to impact the South African economy, but it is also going to impact that of our neighbours,” Nelisiwe Magubane, director general at the energy department, told journalists after a cabinet meeting.
Any disruption to crude imports could hit fuel supplies in South Africa, which has suffered shortages in the last year because of strikes and refinery problems, she said.
Magubane said South Africa will be looking to the African continent to source oil to replace supplies from Iran.
“We intend looking at other countries, specifically in Africa, mainly Angola and Nigeria,” she said, adding that Saudi Arabia would also be another source of oil.
The United States earlier this month exempted South Africa, India , Malaysia, South Korea, Sri Lanka and Turkey from the sanctions, saying South Africa had significantly reduced its oil imports from Iran.
South Africa used to import about one third of its crude oil from Iran. Its crude oil imports from Iran rose to 505,908 tons in March, up from 417,188 tons the previous month. But such imports fell 43 percent to 286,072 tons in April from March, customs data showed.
The EU sanctions against Iran remains a hurdle for South Africa. These sanctions include a ban on the provision of insurance and reinsurance by EU insurers to Iran and Iranian owned companies. The EU also bans new contracts on imports of petroleum and petroleum products from Iran and demands an end to existing contracts by July 1.
“Unlike the U. S., the EU legislation does not give provision for any exception. Although the U. S. granted the exception, the EU sanctions will make it impossible for importation of crude oil from Iran due to the ban on the provision of insurance and reinsurance by EU insurers to the State of Iran and Iranian owned companies,” the department of energy said on Thursday.
The U. S. and EU impose the sanctions citing Tehran’s suspected pursuit of nuclear weapons.
The South African government is actively negotiating with the EU to remove the hurdle.
Magubane said she expected a “breakthrough” soon in talks with Europe on the issue.