Pipeline users could face 45% tariff hike

IF THE R14-billion cost of the two latest pipeline projects is not included in the draft framework for pipeline service pricing – which is currently under debate – users of Transnet Pipelines could eventually get hit with a 45% tariff hike. The present service pricing formula is based on the costs of the original Durban-Gauteng fuel pipeline. But these current user costs do not contribute to the R3-bn, 3.5-bn-litrea- year fuel pipeline from Maputo to Mpumalanga – already licensed by the National Energy Regulator of SA (Nersa) – nor the proposed R11-bn multi-product line linking Durban with Gauteng. Users could face increases to the tune of 45% if the costs of these new construction projects are not included in the draft tariff formula, Transnet consultant Grove Steyn recently told a Nersa public hearing on the issue. Past users paid for the infrastructure used at present, and so the current users should pay for future projects, Steyn added.