This also comes amidst the problem of blackout in the country which has slowed down production.

The country was also last month hit by xenophobic violence which killed about 62 people and left several foreigners mainly Malawians, Zimbabweans and Mozambicans injured.

The violence a little bit damaged the country’s image and slowed down its economy.

Nhlanhla Gumede, deputy director-general of hydrocarbons and energy planning, said the country faces fuel shortage adding that in the third quarter next year 2009 the country won't be able to supply inland (fuel) needs unless something drastic is done.

"If we don't do anything we are likely to have a problem in 2010," he said.

South Africa is the first African country to host the soccer World Cup, but a chronic energy shortfall has affected the nation, cutting production in the key mining sector and regularly plunging millions of homes in darkness.

The energy woes have cast a shadow over preparations for the 2010 football showcase.

A Reuters report Wednesday said Gumede, who was briefing parliament on the government's energy master plan, disclosed that a new fuel pipeline expected to come on stream by 2010 but already behind to construction schedule, could help avert potential inland fuel shortages.

The Reuters report further said state-owned transport group Transnet has been awarded a licence to build the 11 billion rand ($1.37 billion) multi-product pipeline between the port city of Durban and South Africa's commercial province Gauteng, the venue for the World Cup final.

He said the new pipeline will reduce South Africa's reliance on poor and inefficient road and rail transport infrastructure used to ferry fuels inland from the coast.

"The pipeline is a key factor and that's why we have to move on it quickly... There is a tight period that has to be very well managed prior to the advent of the pipeline," Public Enterprises Minister Alec Erwin said.

Erwin said there was sufficient time to head-off potential fuel shortages affecting motorists.

Gumede said the department of minerals and energy estimated the South African economy would suffer massively if there was no fuel.

He said: "22.2 percent of GDP is linked to the availability of liquid fuel. So if we don't have liquid fuels this economy would lose about 1 billion rand a day."
Gumede said Africa's largest economy, a net importer of crude oil, was struggling to store enough fuel reserves to last beyond 10 days.