Nersa approves Sasol Gas maximum price increase amid fluctuating costs

The National Energy Regulator of South Africa (Nersa) has greenlighted a significant adjustment in the maximum gas price set by Sasol Gas, raising it from R87.04 to R90.57 per GigaJoule (GJ) for the second quarter of the 2025/2026 financial year.

This 4% increase comes in response to various market pressures, including the rising costs of gas imported from Mozambique, fluctuations in oil-linked derivatives, exchange rate movements, and shifts in the US Producer Price Index (USPPI).

This quarterly adjustment is part of an ongoing strategy put in place by Nersa on June 30, 2025, granting Sasol Gas the authority to revise its maximum gas price every three months, based on changes in gas acquisition costs.

Sasol Gas is required to demonstrate the rationale behind price changes by providing relevant cost and pricing data to Nersa, ensuring that these adjustments are both reasonable and justifiable.

"For clarity, Nersa would like to emphasise that the extent of adjustment does not necessarily translate into the same amount of adjustment on actual gas prices Sasol Gas charges to its customers," said Nomfundo Maseti, full-time regulator member primarily responsible for piped-gas regulation.

"It is expected of Sasol Gas to charge actual gas prices lower than the maximum price." 

In August, Sasol Gas submitted detailed documentation to Nersa reflecting its request for the maximum gas price adjustment covering the period from October 1 to December 31, 2025.

Nersa said it had verified the information against contractual provisions and performed integrity tests to confirm the accuracy of the reported gas volumes and the increase in acquisition costs.

These reported volumes were further corroborated against gas volume balance data received from Mozambique.

Maseti said the quarterly monitoring approach was designed to safeguard consumers by ensuring that maximum prices remain reasonable and justified, promote accountability by requiring licensees to substantiate adjustments with verifiable cost data and enhance transparency through Nersa’s ongoing scrutiny of costs and gas price changes.

Nersa last month announced that it has approved Egoli Gas’ application for a maximum price of R151.14/GJ for end-user customers and R143.58/GJ for resellers for the period March 1, 2025, to February 28, 2026.

Nersa also approved the quarterly adjustment of the maximum price until February 28, 2026, based on Egoli Gas’ contract with its supplier.

This decision is critical, as it mitigates the lack of adequate competition within the piped-gas market by setting maximum prices that serve to emulate prices that persist in competitive markets and facilitate the establishment of conditions for effective competition.

Further, Egoli Gas must apply for the next maximum price at least four months before the expiry of the currently approved maximum price.

BUSINESS REPORT