- Minister of Minerals and Energy Buyelwa Sonjica discusses the impact of high oil prices on the world's economies (Footage: Danie de Beer; Editing: Darlene Creamer) (4.03 MB)
The world and South Africa needed a more stable oil price and a more transparent oil pricing system to enable proper energy planning, Minister of Minerals and Energy Buyelwa Sonjica said on Thursday.Speaking at the Oil Summit in Midrand, the minister noted that the volatility of the oil price impeded planning and budgeting, which were "critical ingredients" of a stable economy.
She added that high oil prices earlier this year had highlighted the importance of oil in the modern economy.
Sonjica emphasised that the recent drop in the oil price should not "give us false hope" and should allow the country to "fall victim" to future price escalations.
National oil and gas company PetroSA trading, supply and logistics vicepresident Dr Nompumelelo Siswana said it was difficult to predict future oil prices, but that the price of oil and petroleum products were forecast to continue rising until 2020.
With demand for oil set to grow, and with the price expected to continue increasing, technology innovation would be an "important tool" to ensure greater energy security, climate protection and economic growth, Sonjica suggested.
"It may be important that, as a country, we seriously explore energy technologies that can provide for the gradual transition towards energy systems for the longer term," she said.
The minister emphasises that the development of these technologies would require strengthened public-private partnerships.
Sonjica added that the high oil price earlier this year could not be attributed merely to the "mismatch between supply and demand", noting that speculative activity had largely contributed to the problem.
Sonjica said the country had to gain a better understanding of market speculation, but also had to deal with the "fundamental issues" of rising demand, low investment in the supply of oil, and the depletion of oil reserves.
The minister also stressed the importance of reaching bilateral agreements with regard to energy, such as that signed between South Africa and Venezuela earlier this year, as part of a mitigating strategy against the high oil price.
She noted that such "mutual relations" would advance global growth.