Manufacturing Circle appeals to Parliament on piped gas tariff
Industry body, the Manufacturing Circle (MC), has requested an opportunity to make a presentation to Parliament's Portfolio Committee on Energy on key energy issues and their impact on manufacturing, executive director Coenraad Bezuidenhout said on Wednesday.
In a letter to committee chairperson Sisa Njikelana, the organisation said it had “grave concerns” about the potential impact that a determination on natural piped gas tariffs - made earlier in the year by the National Energy Regulator of South Africa (Nersa) - would have on the country’s larger manufacturing industries.
The MC expressed concern that this issue may not be dealt with in light of the “manner” in which the Gas Amendment Bill was progressing.
“We would also like to appraise the committee of our concerns in respect of the implementation of the Electricity Pricing Policy, especially in respect of municipal charges on electricity.
“Security of electricity supply is also a huge concern for manufacturing, especially for fast-moving consumer goods processors and manufacturers employing injection moulding processes,” Bezuidenhout said.
He added that an independent report by researcher NUS Consulting found that South Africa had the most expensive natural gas in relation to a basket of other manufacturing destinations.
“Key concerns relating to the Nersa methodology relate to the basket of energy alternatives against which the price for natural piped gas is determined, rather than the cost to exploit the resource,” he commented.
Bezuidenhout further called for a dispensation that promoted affordable access, fair profits and greater competition in the gas sector.
“In light of the present situation, it is also essential that the regulatory framework be strengthened to include administrative recourse for industry on the Nersa determinations,” he asserted.
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