Transnet granted 6.4% pipeline tariff increase

13th March 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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The National Energy Regulator of South Africa (Nersa) on Wednesday granted State-owned Transnet a 6.4% increase in 2013/14 petroleum pipeline tariffs.

If the Energy Minister 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, this would represent a 1.4c/l increase in the pipeline tariff from Durban to Johannesburg.

It would also represent an 8.53% rise in allowable revenue for Transnet, from R2.6-billion in 2012/13 to R2.8-billion in 2012/13.

Transnet initially applied for a 22.6% increase in its allowable revenue, which would have resulted in a 4.72c/l increase in inland petroleum product prices.

Nersa initially published a draft tariff determination for public comment proposing a 7.3% increase in allowable revenue.

In making its decision, the regulator weighed public interest, regulatory certainty, Transnet’s New Multiproduct Pipeline project reaching its capital expenditure peak and current and future debt funding.

“In Nersa’s view, this will strike a satisfactory balance between the various factors that Nersa had to consider,” the regulator said in a statement.

Meanwhile, Nersa called on Transnet to outline a proposed system of penalties to be included in future tariffs. The organisation aimed to ramp up efficiencies by penalising Transnet customers causing inefficiencies in the operation of the pipeline system.

Nersa cited not delivering slugs to the pipeline on schedule or the failure to take delivery of slugs of petroleum on schedule as actions that could be penalised.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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