While the Draft Petroleum Products Bill aims to replace the outdated 1977 Petroleum Products Act, its stricter regulations could increase compliance costs to varying degrees across the downstream petroleum value chain, says industry association National Association of Automotive Component and Allied Manufacturers (NAACAM) analyst Nomqhele JD Dube.

The Bill is expected to strengthen licensing, compliance and enforcement mechanisms across the downstream petroleum value chain, including the blending and distributing of lubricants and base oils, she adds.

Consequently, automotive suppliers and original-equipment manufacturers (OEMs) will likely face tighter regulatory oversight on how lubricants are sourced, stored, documented and handled.

This could require components manufacturers and lubricant suppliers to enhance traceability systems, such as the certification of authenticity and quality data, and align their purchase and specification processes with licensing conditions embedded in the Bill and associated downstream petroleum regulations.

Dube adds that stricter licensing and traceability could increase compliance costs associated with documenting quality assurance and environmental reporting, as well as health and safety inspections for suppliers and lubricant producers.

“For globally competitive, export-oriented OEM programmes, this means higher administrative and quality-control overheads to maintain compliance and demonstrate adherence to both local and foreign regulatory regimes.”

She elaborates that suppliers may need to invest in digital tracking systems; third-party testing, particularly for chemical content; and integrate compliance data into OEM qualification processes, which raises operating costs, but mitigates export-related risks.

This could also disadvantage smaller suppliers that lack capital for compliance infrastructure without policy support or shared industry initiatives, where failure to align with global standards could result in losing OEM contracts.

International Impact
South African components manufacturers and lubricant formulators must meet global safety and performance specifications set out by international standards organisations, such as the American Petroleum Institute, the European Automobile Manufacturers’ Association and International Organisation for Standardisation, to remain eligible as suppliers in global programmes.

Compliance with global safety and performance specifications ensures that local products can be used in OEM engines and systems without performance or warranty issues, and will not be blocked by export restrictions elsewhere, Dube says.

She notes that international chemical regulation is dynamic and often stricter than local policy. Compliance often demands ongoing monitoring, testing and reformulation, which requires technical expertise and investment in research and development (R&D) and testing facilities.

One such case is increased restrictions on per- and polyfluoroalkyl substances (PFAS) and other persistent chemistries used in certain high-performance lubricant and fluid applications, owing to their high-temperature resistance.

Increased global restrictions are prompting the reformulation of additives and hydraulic fluids, with suppliers having to balance sustainability with mechanical performance, and secure OEM qualification for new formulations, she adds.

However, reformulating away from PFAS requires longer testing cycles and validation to ensure chemical alternatives meet performance and durability specifications, particularly for high-load engine parts and transmission systems.

Meanwhile, global disruptions, such as shipping delays and base stock supply constraints, alongside localisation policies, have prompted industry players to invest in local blending, packaging and additive supply to enhance supply security and reduce reliance on imports.

South Africa’s lubricant market is sizable, with market researcher Mordor Intelligence stating that the industry is estimated to have produced about 184 400 t in 2025. Engine oils comprise over 60% of that demand, while full synthetics is growing at about 2.1% a year, indicating robust and enduring lubricant consumption.

Dube also states that local additive clusters and tailored blending present opportunities for value retention and workforce development, provided compliance with stringent OEM quality standards is maintained through rigorous testing and certification.

“NAACAM members can leverage global regulatory alignment as a differentiator for export markets, while expanded on-site oil management, oil analysis and digital monitoring services can create new service lines that enhance competitiveness,” she says.

Advanced Technologies
Evolving OEM lubricant specifications are also tied to fuel efficiency and emissions reduction which, in turn,  are influencing component design, such as tighter tolerances, advanced surface finishes and materials, that can withstand lower viscosity oils and high-temperature thermal cycles.

Additionally, electric vehicles (EVs) and hybrids impose different requirements for thermal management fluids, high-performance greases and dielectric coolants, compared with those of internal combustion engine oils, Dube explains.

Components, such as power electronics and battery systems, require specialised thermal fluids that handle higher heat flux and electrical insulation.

South Africa’s lubricants industry has begun to adjust, with major lubricant formulators offering synthetic, biodegradable and specialised fluids aligned with global trends; however, local capability to produce EV-specific formulations remains limited, Dube says.

She asserts that increased investment in technology transfer and co-development partnerships with global suppliers will help bridge this gap, catalysing innovation and local R&D.

The growing EV and hybrid fleet present a significant aftermarket opportunity for locally produced or adapted thermal and lubrication solutions, creating potential for new revenue streams and supplier development while capturing value that has traditionally been exported, Dube concludes.