Sasol Gas has confirmed that it has delayed the implementation of a controversial 96% increase in the price of pipeline gas, which was initially announced as being effective from August 1.
Had the increase been introduced, the price of gas charged to South African customers would have increased from R68.39/GJ to R133.34/GJ.
In a letter to customers, Sasol Gas said that it was continuing to engage with the National Energy Regulator of South Africa (Nersa) on the gas price to be implemented for the period to June 30, 2023, “in the hope that the matter can be finalised amicably and swiftly, in the interest of price certainty for gas suppliers, traders and consumers”.
“Pending these ongoing engagements with Nersa, Sasol Gas has decided not to implement the new actual gas price of R133.34/GJ effective 1 August as previously communicated to you,” the letter reads, adding that it will continue to charge R68.39/GJ.
Following news of the hike, Nersa insisted that it had not approved any increase in the maximum price of pipeline gas and stated that it “would not approve any increase which doubles its previously approved maximum gas price”.
This statement followed an outcry from the Industrial Gas Users Association of Southern Africa (IGUA-SA), which warned that the hike would cost the South African economy R325-million a month and could trigger both manufacturing cutbacks and retail price hikes.
IGUA-SA has been at loggerheads with Nersa over the gas-price methodology for years and in December last year lodged an application in the Gauteng division of the High Court challenging Nersa’s 2021 approval of Sasol Gas’ maximum gas prices.
It has also made repeated calls for Nersa to adopt a methodology that uses Sasol’s cost base as the main reference point for setting the price.
Prior to its decision to delay the increase, Sasol Gas said the price had been determined using the approved calculation methodology and had been communicated with Nersa.
It also noted that the revised price was well below the maximum gas price as determined by the Nersa Maximum Gas Price decision.
“Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol Gas said.