Another petrol hike on the cards

Johannesburg - The petrol price may increase by a further 1.4c a litre in Gauteng after Nersa approved new tariffs for Transnet's petroleum pipelines.

"The consequent petrol price rise is expected to be 1.4c per litre," the National Energy Regulator of SA said on Wednesday.

It said this would represent a 0.1% increase in the February 2013 retail price of 93 octane petrol in Gauteng.

This would happen if the energy minister decided to use the pipeline tariff as a proxy for the cost of transporting fuel from Durban to Johannesburg.

Nersa said it had amended Transnet Limited’s licence to operate its petroleum pipeline system by setting tariffs, as a condition of that licence, for the period from April 3 2013 to April 1 2014.

Last week the petrol price went up by 81c a litre and diesel by 58.38c per litre.

The increases came into effect two weeks before the 30c a litre increase in the general fuel and Road Accident Fund levy announced by Finance Minister Pravin Gordhan.

The fuel levy increases take effect next month, pushing the price of 95 octane petrol to R13.38 a litre in the inland provinces.

Transnet had applied for a 22.6% increase in its allowable revenue, which would have resulted in a 4.72c per litre increase in inland petroleum product prices, had it been granted.

In arriving at its decision, Nersa said it looked at factors such as public interest, regulatory certainty, the new multi-product pipeline project reaching its capital expenditure peak, and current and future debt funding.

"Consequently, Nersa has set petroleum pipeline tariffs that will allow Transnet to realise an 8.53% increase in allowable revenue compared to the 2012/13 tariff period."

This would be an increase from R2.57bn in 2012/13 to R2.79bn in 2012/13.

Nersa said Transnet pipelines reported a 7.1% reduction in total petroleum volumes pumped from 2010/11 to 2011/12.

This was a decline from 18.025 billion litres in 2010/11 to 16.741bn litres in 2011/12.

Transnet has forecast an overall 4.6% increase in volumes to be pumped in the 2013/14 financial year.

This includes an approximate 5.96% increase in petroleum product volumes transported from the coast to the inland region, as a result of the new pipeline capacity that Transnet has brought into operation.