South Africa’s Sasol cuts production, sales target due to COVID-19 lockdown

JOHANNESBURG (Reuters) – South African petrochemicals giant Sasol Ltd on Wednesday cut its guidance for synthetic fuel production and liquid fuel sales for this financial year due to a three-week nationwide lockdown linked to coronavirus.

Sasol is now expecting to produce approximately 7.3-7.4 million tons of synfuel against the previously guided range of 7.7–7.8 million tons, the company said in a statement to the Johannesburg Stock Exchange.

It is also targeting sales of 50–51 million barrels of liquid fuel for the financial year 2020, against 57–58 million barrels previously, it said.

Synfuel or synthetic fuel is a form of liquid fuel made from coal in South Africa. Sasol is the world’s biggest producer of motor fuel from coal.

South African President Cyril Ramaphosa imposed a nationwide lockdown at the end of March to contain spread of the deadly coronavirus, which has already infected 1,749 people in the country and killed 13.

The lockdown, which prompted rating agency Moody’s to downgrade the country’s sovereign rating to junk, crashed domestic demand at a time when the economy had already slipped into a recession.

It is projected to contract further in the current financial year.

“Sasol’s management team is in the process of proactively identifying further measures to provide an additional buffer against short-term volatility,” said the company in its statement, referring to the fall in demand in the country.

The group, which is also facing high debt levels and falling oil and chemical prices, said it has decided to suspend production at its inland crude oil refinery Natref from April 9.

“A decision was also made by Sasol to reduce daily production rates at our Secunda Synfuels Operations (SSO) by approximately 25%,” it said.

A further reduction in rates may be required depending on further developments in the fuels market, the company added.

However, Sasol said despite the suspension of output at the Natref refinery and lower production rates at SSO, the country’s current demand for fuels and chemicals, including sanitisers, will be met.

It had said on March 31 that its full-year results could be hit by potential disruptions to production, supply chains and construction as the coronavirus continued to spread across the world.

(Reporting by Promit Mukherjee; Editing by Jan Harvey)

This article was first published on Reuters Africa and is republished with its permission.

For more coverage on COVID-19 visit:

Partner Content


THE COVID-19 GLOBAL pandemic has brought forward the future. It has brought about humanity’s biggest challenge in a century, to choose between...

Mauritius-Africa, a partnership for shared prosperity

By: Mathieu Mandeng In the current complex and challenging circumstances that are testing the...


The City of eThekwini pulled out all stops to give fans of the annual Vodacom Durban July (VDJ). The Virtual Vodacom Durban...

GAUTRAIN – Why It Matters

Economic growth continues to be one of the focus areas for the Gauteng Provincial Government (GPG) and the Gautrain responds to that...

Trending Now

Big U.S. companies form group to boost hiring of minorities in New York

“Today’s economic crisis is exacerbating economic and racial divides and exposing systemic barriers to opportunity”, Dimon said in an opinion piece in the Wall Street Journal on Monday, adding that often high-achieving people across New York were not given opportunities at the city’s top employers.

South African rand weakens in cautious trade

JOHANNESBURG (Reuters) - South Africa’s rand weakened early on Tuesday, remaining on the back foot after a national holiday that kept liquidity...

Hong Kong goods for export to U.S. to be labelled made in China

The United States on Friday imposed sanctions on Hong Kong Chief Executive Carrie Lam and the city’s current and former police chiefs accused of curtailing political freedoms in the former British colony.

Sasol warns of annual loss as lower oil price and pandemic weigh

JOHANNESBURG (Reuters) - South Africa’s Sasol warned on Tuesday it will report an annual loss after a drop in oil and chemical...

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

- Advertisement -