Sasol to appeal court ruling on maximum gas price

Sasol, our monopoly supplier of natural gas, is to appeal a court ruling setting aside the national energy regulator's approval of its maximum gas prices for the period March 2014 to June 2023.

Nersa's price decision was set aside by the Pretoria High Court last month, on 20 June.

Sasol had to refund customers about R1.7 billion after a previous ruling that reversed the 2013 and 2017 price determinations.

The energy and chemical company has been accused of gas price gouging for much of the past ten years.

Motheo Khoaripe gets some insight from Jaco Human, CEO of the Industrial Gas Users Association of Southern Africa (Igua-SA).

Putting the case into context, Human points out that Nersa has implemented three pricing methodologies since 2014, and the one at issue here is the second methodology.

"The first one was overturned in the Constitutional Court in 2019 as unlawful and irrational and it provided guidelines to to reset the pricing into a second methodology from 2014 to 2021. It is this second methodology at issue - industrial gas users raised concern at the time when Nersa adopted it, that it's perhaps even worse than the first one."

Jaco Human, CEO - Industrial Gas Users Association of Southern Africa

"We refer to this methodology as the international benchmark pricing for gas in SA, and that allowed Sasol at a point in 2021 to actually increase pricing by up to 270%."

"It indeed proceeded to increase pricing by around 96% at the time. I think it was at that point that the industrial consumer said, we need to take this matter further." "

Jaco Human, CEO - Industrial Gas Users Association of Southern Africa

Human says Nersa itself admitted that the second methodology was not implementable, and then moved to implement a third one which came into effect in July 2023.

He feels that the price of gas to consumers is really underpinning all of this.

"Gas is a significant input into the essential items we use on a daily basis in the primary manufacturing sector. We're talking steel, construction, beverages, packaging we use... up to the bread we consume."

Jaco Human, CEO - Industrial Gas Users Association of Southern Africa