The National Energy Regulator of South Africa (Nersa) earlier this month approved a 6.9% increase in Transnet’s petroleum pipeline tariffs for the period from April 1, 2015, to April 4, 2016.
While the increase is lower than the 8.2% increase Transnet applied for, it is expected to lead to a 1.89c/ℓ increase in the petrol price in Gauteng.
This will mean a 0.17% increase in the March retail price of 93 octane petrol in Gauteng and will also be impacted on if Energy Minister Tina Joemat-Pettersson used the pipeline tariff as a proxy for the cost of transporting fuel.
Nersa noted in a statement that it had considered factors including public interest, regulatory certainty and Transnet’s forecasts for the completion of certain parts of its new multiproducts pipeline project.
Transnet’s allowable revenue increased from R2.94-billion in 2014/15 to R3.36-billion for the 2015/16 financial year.
This percentage increase was moderated by a 2.81% increase in volumes forecast for the year. Transnet had forecast an overall 2.81% increase in volumes to be pumped in the 2015/16 financial year – from 16.7- billion litres in the 2014/15 latest estimate to 17.1-billion litres for 2015/16.
Nersa hoped to see pipeline volumes increase as this would result in lower tariffs and the reduced need for rail and road transport, which would lower the health, safety and environmental risks associated with road and rail transport.
The regulator said there was scope to move more volumes away from road and rail transport to pipeline transport and added that it would monitor the transition of volumes from road and rail to pipeline transport.
Meanwhile, in an attempt to improve pipeline efficiencies, Nersa had facilitated workshops between Transnet and its customers, which had ensured that Transnet and its customers cooperate more closely.
Transnet would meet its customers monthly to discuss improvements of operational efficiency of Transnet’s pipeline system and Transnet would regularly submit reports to Nersa.