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NERSA Public Hearing Regarding Sasol Gas Pricing and Tariff Submissions


Sasol today attended the NERSA public hearing regarding Sasol Gas’ pricing and tariff submissions, as required by the Gas Act.

The Gas Act requires that NERSA approves maximum prices. These prices are intended to set a ceiling, or a cap, above which operators, such as Sasol Gas, cannot price.

In line with the stipulated NERSA process, Sasol Gas made its submission to the regulator, in December 2012. The Sasol Gas submission followed NERSA’s two year consultation process.

The public hearings were a further opportunity for industry representatives to address the subject of maximum pricing, which is the first step towards standardising prices, as required by the Gas Act.

At this stage in the process, NERSA has not yet approved the proposed maximum prices but are expected to make a decision shortly. The approval of maximum prices by NERSA, will initiate the second step in the process, which will see Sasol Gas publishing its actual prices.

Sasol Gas Managing Director, Wrenelle Stander, offered closing remarks at the hearing and emphasised that the Sasol Gas submissions were not a request to increase prices.

“These submissions, as required by the NERSA process, seek to migrate all customers to standard prices and tariffs”, Stander said. “We are acutely aware that this migration to standardised pricing and tariffs will have varying impacts on our customers. Some customers will pay more, while others will pay less but the transition needs to take place in a manner that both retains customers, while also securing the future sustainability of the local gas industry,” she said.

Current local pricing, in the gas market, has resulted in the natural gas industry in South Africa tripling in size over an eight year period. By 2014, at least R21 billion rand would have been invested in the development of the South African gas industry, almost doubling the initial investment, made possible as a result of public private funding.

Today, the gas industry accounts for just 3% of the South African energy mix. There is tremendous demand for gas in South Africa, particularly as energy prices continue to rise. Further significant infrastructure and upstream exploration investment, will be required, to meet this growing demand and it is within this context that Sasol Gas’ submissions were made.

NERSA has indicated that a decision, regarding the Sasol Gas pricing and tariff submission, will be handed down by the end of March. The NERSA process has been underway for the past two years and has included a number of public hearings and workshops.

Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 12 October 2012 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.


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