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.

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