South Africa is set to face a bitumen shortage in the first half of 2013 as three oil refineries close, with knock-on effects to the road construction industry expected.

Engen, Caltex, and Sapref are all expected to shut down oil refineries over the five months to the end of May, with bitumen output – which is a by-product of the refining process and a key material used for road construction – set to take a hit.

According to Philip Hechter, chairman of the South African Bitumen Society and Chief Executive Officer of Much Asphalt, the country will suffer a 20 per cent bitumen deficit pursuant to the refinery closures.

“This will put pressure on the system and I guess demand will outstrip supply,” said Hechter, reports the Independent Online.

However, any supply shortfall may be countered in part by import of the product – also known as asphalt – and the deficit will not cause the level of problems experienced in South Africa in 2011 when extensive bitumen shortages disrupted the country’s construction sector significantly stopping road rehabilitation efforts and sending some companies out of business entirely.

Hechter says that in 2011: ““we were caught with our pants down”, and that this time around the country and industry players will be better prepared to counteract the shortage through imports and stock-piling of the material.

“There will still be pressure on the system but it [the shortage] will be better managed,” concludes Hechter.

Imports will answer between 10 and 15 percent of the demand deficit, thus leaving only approximately a 5 to 7 percent shortfall, according to Hechter.

Much Asphalt has already put in place plans to import bitumen stock, with a shipment set to arrive next months with later shipments expected within the following month.

However, a financial squeeze will still be felt by players importing bitumen in order to remain operational, as the imported product carries a 1,500 Rand ($ 168.7) per tonne premium as compared to locally sourced material prices.