Can South Africa Avoid the Looming Gas Shortage and Price Hikes?
South Africa faces looming natural gas crisis, with growing supply gap could trigger energy price shocks and industrial slowdowns as early..
Quick overview
- South Africa is projected to face a significant natural gas shortage starting in 2026, despite recent offshore discoveries.
- The impending gas crisis could jeopardize around 70,000 jobs and up to 4% of the country's GDP, particularly affecting key industries.
- Declining gas output from Mozambique, which supplies over 85% of South Africa's natural gas, is a major factor contributing to the crisis.
- Urgent action and strategic planning are needed to prevent severe economic consequences and industrial disruptions.
South Africa faces looming natural gas crisis, with growing supply gap could trigger energy price shocks and industrial slowdowns as early as next year, raising alarms across economic sectors.
PASA Warns of Imminent Gas Shortfall
In a stark assessment delivered at the recent WITS Gas Symposium, the Petroleum Agency of South Africa (PASA) projected that the country could face a major natural gas shortage starting in 2026. Despite the promising offshore discoveries at Brulpadda and Luiperd made in 2019 and 2020, the agency noted that commercial production remains years away, offering no immediate relief.
PASA’s update has intensified concerns about South Africa’s growing reliance on imported gas from Mozambique, a source that is itself declining and increasingly unstable. With limited domestic infrastructure and no significant alternative sources ready to scale, the nation could find itself in a critical energy supply crunch.
Ripple Effects: Industry, Jobs, and GDP at Stake
The potential shortage poses a serious threat to South Africa’s industrial backbone. Analysts warn that without urgent mitigation strategies, the fallout could result in the loss of up to 70,000 jobs and wipe out as much as 4% of the country’s GDP.
Industries such as petrochemicals, metals, and large-scale manufacturing, which are highly dependent on natural gas, face the greatest risk. These sectors collectively contribute between R300 billion and R500 billion annually to economic output and are considered essential for employment and export competitiveness.
Without fast-tracked investment in infrastructure, storage, or alternative fuels, the gas crunch could trigger a cascade of disruptions, including rising electricity and production costs, reduced industrial output, and slowed economic growth.
Mozambique Supply Under Pressure
The root of the crisis lies in the declining gas output from Mozambique’s Pande and Temane fields, which currently supply over 85% of South Africa’s natural gas via an 850km pipeline. These reserves are expected to see sharp declines between 2026 and 2028, threatening what experts are calling a “gas cliff”—a sudden and steep drop in gas availability that could have catastrophic consequences for the industrial sector.
A Call for Urgent Action
Energy and Electricity Minister Kgosientsho Ramokgopa has warned that South Africa stands on the edge of a “gas cliff,” emphasizing that the risk is imminent but not inevitable. “We have the institutional memory, the analytical tools, and the public-private platforms to act,” he said, calling for urgent and coordinated efforts to avert a full-blown energy crisis.
Offshore Discoveries: A Delayed Solution
The Brulpadda and Luiperd discoveries offshore hold long-term promise, but according to PASA, they are not yet ready for commercial development. With sufficient investment and effort, they could eventually offer relief. However, in the short term, these resources do not offset the pressing decline in current supply.
Conclusion: Time for Strategic Planning
South Africa’s gas supply challenge is not merely an energy issue—it is a national economic threat. The need for decisive planning, accelerated infrastructure investment, and regional energy collaboration has never been more urgent. Without immediate action, the country may soon face industrial disruptions, job losses, and slowed economic growth.
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