The National Energy Regulator of South Africa (NERSA) has approved an increase in allowable revenue for Transnet’s petroleum pipelines system, granting an 8,73% rise for the 2025/26 financial year and a further 5,71% increase for 2026/27.
If the Minister of Mineral and Petroleum Resources uses the pipeline tariffs as a benchmark for fuel transportation costs, the fuel price could rise by 5,23 cents per litre in 2025/26 and by an additional 3,80 cents per litre in 2026/27.
The determination sees Transnet’s allowable revenue grow from R7,21 billion in the 2024/25 financial year to R7,84 billion in 2025/26, followed by an increase to R8,29 billion in 2026/27. The approved tariffs – effective from April 1 to March 31, 2027 – follow Transnet’s original application for a 20,77% increase in 2025/26, which would have raised allowable revenue to R8,71 billion.
NERSA’s decision reflects a more moderated increase following regulatory considerations, including the deferral of R800 million in the 2024/25 revenue determination, the regulator said. “Had Transnet’s request been fully approved, the Durban-to-Alrode tariff would have increased by 13,34 cents per litre in 2025/26, followed by a marginal decrease in 2026/27.
“While we recognise Transnet’s need to recover costs, our decision balances the operational sustainability of the pipeline system with the economic impact on consumers and industry.”
Other issues considered in the determination included:
- Rising incidents of pipeline tampering and fuel theft
- Progress on the Multi-Product Pipeline Project
- Market comparisons with alternative transport modes such as road and rail
- Volume risk-sharing mechanisms
- Economic impact assessments
- Strategies to smooth out tariff fluctuations
Despite the tariff hikes, the regulator said pipelines remain the most cost-effective method of transporting petroleum inland, particularly when compared to road or rail. “The shift of fuel volumes from road to pipelines is seen as critical in alleviating pressure on transport infrastructure and reducing road tanker accidents,” said NERSA.
The regulator also reiterated concerns about criminal activities targeting fuel pipelines, citing pipeline tampering as a major economic and safety risk. “Pipeline theft not only sabotages the country’s economy but also results in tragic loss of life. Greater enforcement of bylaws by municipalities could help curb this criminal activity,” NERSA said.
The full decision and reasons for the determination will be published on NERSA’s website following the regulator’s finalisation of confidential information treatment.
