The National Energy Regulator of South Africa (Nersa) has set the allowable revenue for State-owned entity Transnet’s petroleum pipeline system at 23.03% for the period spanning April 6, 2016, to April 4, 2017, it announced in a statement on Tuesday.
Transnet had applied for a 25.8% increase in its allowable revenue, which would have resulted in a 6.2c/ ℓ increase in inland petroleum product prices, had it been granted.
Nersa noted that if the Energy Minister Tina Joemat-Pettersson decided to use the pipeline tariff as a proxy for the cost of transporting fuel from Durban to Johannesburg, as had been the case in the past, the consequent petrol price rise was expected to be 5.4c/l in April, which represented a 0.44% increase on the March 2016 retail price of 93 octane petrol in Gauteng.
The effect of the regulator’s decision was that the tariffs for all pipelines would increase by 18.56% with effect from April 6. The inflation increase was a consequence of the addition of further New Multi Product Pipeline (NMPP) infrastructure assets valued at about R4-billion coming into operation in the coming tariff year.
In arriving at its decision, Nersa said it had weighed a variety of factors, including public interest, regulatory certainty and Transnet's forecasts for the completion of certain parts of its NMPP project.
Nersa had placed a temporary hold on the inclusion of NMPP projects.
This year, according to Nersa, Transnet had again not submitted a multiyear tariff application. The regulator stated that it appeared that Transnet's inability to complete parts of its NMPP project by the forecast dates, as well as the repeated need to change these dates, was the reason behind Transnet's persistence with single-year tariff applications.