South African motorists are set to feel the pinch at the pumps, as the National Energy Regulator of South Africa (Nersa) has confirmed upcoming petrol price hikes linked to newly approved tariff adjustments on the country’s petroleum pipeline system.
Petrol Prices Set to Rise in 2025 and 2026
The increases, which will kick in from the start of the 2025/26 financial year, will see fuel prices rise by 5.23 cents per litre. A further adjustment of 3.80 cents per litre is planned for the following year, 2026/27.
These tariff revisions stem from the approval of higher fees for the transportation of fuel along Transnet’s petroleum pipeline network, which plays a vital role in moving fuel from coastal refineries in Durban to inland markets, including Johannesburg.
Pipeline Tariffs: A Key Factor in Fuel Prices
The Department of Mineral and Petroleum Resources typically uses these pipeline tariffs as a benchmark to determine the cost of fuel logistics, which is a key component of the retail fuel price.
Nersa noted that the revised tariffs will enable state-owned logistics operator Transnet to increase its Allowable Revenue (AR) by 8.73% for the 2025/26 financial year, with a further 5.71% increase approved for 2026/27.
Transnet’s Tariff Application and Nersa’s Final Decision
The approval follows a formal tariff application submitted by Transnet on 2 August 2024. In its proposal, the company requested an AR of R8.71 billion for 2025/26 — a significant 20.77% jump compared to the previous year’s allowance.
Had the initial application been approved as submitted, fuel users would have faced a steeper increase of 13.34 cents per litre in the Durban-to-Alrode pipeline tariff for 2025/26, followed by a slight decrease of 0.58 cents per litre in 2026/27.
However, Nersa opted for a more moderate adjustment, citing the need to balance the financial sustainability of the pipeline system with public interest and broader economic considerations.
Factors Behind the Fuel Price Adjustment
The regulator highlighted several key factors in its decision-making process, including:
- The need for risk-sharing mechanisms around fluctuating fuel volumes.
- An economic impact assessment on the potential strain on consumers.
- A smoothing approach to avoid sharp tariff spikes.
- Ongoing costs related to the Multi-Product Pipeline (MPP) Project.
- Concerns over rising incidents of pipeline tampering and fuel theft.
- Comparative analysis of transporting fuel via road and rail.
Pipelines: The Most Cost-Effective Transport Option
Nersa emphasized that pipelines remain the most efficient and cost-effective way to move petroleum products inland, particularly when compared to alternatives like tanker trucks or freight rail. Beyond economic reasons, shifting more fuel transport to pipelines helps reduce congestion on the country’s overstretched road and rail networks, lowering the risk of road accidents involving fuel tankers.
Growing Concern Over Fuel Theft
Despite the operational advantages of pipelines, the system faces growing security threats. Nersa raised alarms over rising cases of criminal syndicates tampering with Transnet’s infrastructure to steal fuel.
The issue was recently spotlighted in Parliament by Transport Portfolio Committee chairperson Donald Selamolela, who warned of organized criminal networks — allegedly involving insiders — targeting fuel pipelines, especially the vital corridor from KwaZulu-Natal to Gauteng.
The Broader Impact of Pipeline Crime
The stolen fuel is believed to be diverted to the black market or even sold back into the formal supply chain, posing serious economic and safety risks. Nersa stressed that these criminal activities not only jeopardize national fuel security but also have fatal consequences.
The regulator has called on municipalities to step up enforcement of local bylaws as part of efforts to curb the attacks on fuel infrastructure.
What This Means for Motorists
As the country prepares for the scheduled petrol price increases over the next two years, motorists are urged to brace for the higher costs, while authorities tackle the twin challenges of infrastructure security and economic pressure.
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