Sasol cashes in on war-driven fuel price surge

Sasol, the world's largest coal-to-fuel producer, is benefiting from higher oil prices sparked by the Iran war, while its refining output has become central to South Africa's fuel security. With Middle East imports stuck in the Strait of Hormuz, Sasol's Secunda plant has ramped up production to its highest level in five years. The company, which holds nearly two-thirds of South Africa's operational refining capacity, expects earnings of up to R62 billion for the year to June, up from R52 billion. CEO Simon Baloyi calls the coal-to-liquids business vital to national security, even as Sasol faces pressure to cut emissions..By Paul Burkhardt.Sasol Ltd., the world’s largest producer of fuel from coal, is reaping the benefits of a surge in fuel prices due to the Iran war, while helping shield its home market of South Africa from the resulting supply shock.Chief Executive Officer Simon Baloyi has increased his focus on coal-to-liquids fuel output, along with production from its crude refinery, at an opportune time..“Sasol continues to play a very key and meaningful role into what I will call the national security of the country,” Baloyi said in an interview in Bloomberg Johannesburg office on Tuesday. The company needs to preserve the Fischer-Tropsch process technology “to make sure that we can produce the required critical chemicals during a time like this,” he said.The company expects to report earnings before interest, taxes, depreciation and amortization of as much as 62 billion rand ($3.8 billion) in the year ended June 30, Sasol said in a filing on Wednesday. That compares with 52 billion rand in the same period a year earlier.Sasol’s coal-to-liquids technology makes it one of South Africa’s largest greenhouse gas emitters, putting it at odds with environmental groups. Investors, however, are weighing the long-term sustainability of the business against its plan to cut emissions 30% by 2030. Under Baloyi, the company has doubled down on its synthetic-fuels operations while seeking to lower carbon intensity by maximizing production, reducing coal used for power generation and increasing its use of renewable energy.Sasol has built about 500 megawatts of renewable-energy capacity, secured more than twice that amount, and plans to procure 2,000 megawatts over time. The company is also pursuing carbon-offset projects, Baloyi said..At the same time, the company’s Secunda hub increased production to the highest in five years, according to a business update last month, helping South Africa plug a gap left by fuel imports from the Middle East that are stuck in the Strait of Hormuz, along with imported oil products from the US.South Africa’s refining sector shrank by about half in the years before the war due to under-investment and accidents that closed plants. That’s left Sasol with nearly two-thirds of operational fuel-making capacity in the country. A unit of Glencore Plc owns the only other working refinery. Sasol was left with buying all the crude to run the 108,000 barrel-a-day Natref refinery after then-partner Prax Group went into business administration last year..“We were fortunate because we can run all of it ourselves while refinery margins are extremely high,” Baloyi said, adding that full ownership of a refinery isn’t always beneficial. “In some instances it can be a bad thing.”Prax’s stake is being sold in a process that is expected to conclude by the end of the year, he said. With the war pushing oil prices beyond $100 a barrel, Sasol’s been realizing a healthy profit considering its $50 breakeven level. The conflict has also taken a toll, however. Operations at the Oryx gas-to-liquids plant in the Persian Gulf that it owns with QatarEnergy were first halted days after the start of the conflict.Production almost resumed at one point, Baloyi said. “We were busy with startup activities, then the war flared up, then we shut down,” he said. .© 2026 Bloomberg L.P..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

Sasol cashes in on war-driven fuel price surge

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