PetroSA has admitted to Parliament that it is technically insolvent and facing a severe liquidity crunch, marked by deteriorating solvency ratios, a mounting tax debt, and a fresh provisional liquidation application filed in the Western Cape High Court, reports The Mercury.

Addressing the Portfolio Committee on Mineral & Petroleum Resources last week as part of the Central Energy Fund (CEF) presentation on its five-year financial performance, governance outcomes, operational progress and strategic priorities, Acting PetroSA CEO Nombulelo Tyandela confirmed that the state-owned enterprise was struggling to maintain going-concern status.

‘We are now facing liquidation challenges, which is an acute crisis. The engagement and support we are getting from the shareholder and the alignment we have, that support is quite imminent so that we can be able to preserve this entity and retain the going concern we need to retain all the time,’ she said.

Tyandela said PetroSA's financial position had been worsened by its reliance on imported finished products, while the company continues to carry the costs of preserving its Gas-to-Liquids Refinery in Mossel Bay.

In the liquidation case, Nako Energy is seeking payment of about R600m, which it claims arose from an agreement reached in March 2025 and remains unpaid.

PetroSA has appointed attorneys to defend the application.

Tyandela also informed the committee that the legal action from Nako came after Swiss fuel trader Gunvor had indicated an intention to institute liquidation proceedings against PetroSA in May.

However, the R796m Gunvor debt was settled in full in August 2026, excluding interest. Of this, R639m was funded through a shareholder loan, while the remaining R157m was paid by PetroSA from its available cash resources.

Tyandela said PetroSA had been engaging with creditors to avoid further legal action.

Full report in The Mercury