If the Minister of Mineral and Petroleum Resources decides to use the National Energy Regulator of South Africa’s (Nersa’s) Petroleum Pipelines System tariffs as proxy for the cost of transporting fuel from Durban to Johannesburg, the fuel price will increase by 5.23c/ℓ in the 2025/26 financial year, followed by a 3.80c/ℓ increase in the fuel price in the 2026/27 financial year.

Nersa on March 6 set the tariffs that will allow Transnet to realise an increase of 8.73% in the 2025/26 financial year allowable revenue, compared with that of the 2024/25 financial year, from R7.21-billion in the 2024/25 financial year to R7.84-billion in the 2025/26 financial year.

Moreover, it would allow an increase of 5.71% in the 2026/27 financial year allowable revenue, from R7.84-billion in the 2025/26 financial year to R8.29-billion in the 2026/27 financial year.

The tariffs are set for a period of two years, from April 1, 2025, to March 31, 2026, and from April 1, 2026, to March 31, 2027.

On August 2, 2024, Nersa received Transnet’s tariff application for the 2025/26 and 2026/27 tariff periods as a condition of its licence to operate its Petroleum Pipelines System.

Transnet applied for an allowable revenue of R8.71-billion for 2025/26, which is a 20.77% increase on the allowable revenue in the Nersa 2024/25 decision.

In the previous determination, Nersa, having calculated the 2024/25 allowable revenue to be R8.01-billion, decided to defer R800-million in the form of a regulatory asset, resulting in allowable revenue of R7.21-billion being used in determining tariffs for 2024/25.

Transnet also applied for allowable revenue of R8.69-billion for the 2026/27 financial year, which is a 0.21% decrease compared with 2025/26.

The Transnet application, if approved, would have resulted in an increase of 13.34c/ℓ in the Durban to Alrode tariff in 2025/26, followed by a 0.58c/ℓ decrease in 2026/27.

In arriving at its decision, Nersa says it considered various factors, including public interest and regulatory certainty, as well as the pipeline tampering and product theft incidents; the multi-product pipeline project; market analysis, that is, comparison of alternative modes of transport for petroleum products; volume risk sharing; economic impact assessment; and smoothening of the tariff trajectory.

Nersa will publish more details on these issues in its Decision and the Reasons for Decision document, set to be published once it has decided on the treatment of confidential information therein.

“The pipeline system is generally the most cost-effective mode of transportation of petroleum and petroleum products from the coast to the inland area, apart from using rail or road transport. This is of special importance for the alleviation of the pressure on both the rail and road infrastructure, noting the road accidents involving tankers in recent times,” Nersa points it.

It says it would continue to monitor the shifting of fuel volumes away from road and rail transport to the pipeline system.

Nersa expresses its concerns about criminal activities, such as tampering with the pipelines with the aim to steal product, and called for enforcement of bylaws by municipalities to mitigate this.