The National Energy Regulator of South Africa (NERSA) has approved updated tariffs for the Petroleum Pipelines System, paving the way for Transnet SOC Limited (‘Transnet’) to increase its Allowable Revenue by 8.73% in the 2025/26 financial year—from R7.2 billion in 2024/25 to R7.8 billion in 2025/26.
This increase will be followed by a further 5.71% rise in 2026/27, bringing the Allowable Revenue up to R8.3 billion.
In its official statement, NERSA explained that the pipeline tariffs serve as a benchmark for estimating the cost of transporting fuel from Durban to Johannesburg. As a result, the fuel price will rise by 5.23 cents per litre in the 2025/26 financial year, with another increase of 3.80 cents per litre in 2026/27. These tariffs are set over a two-year period—running from 1 April 2025 to 31 March 2026, and from 1 April 2026 to 31 March 2027.
NERSA further noted that Transnet submitted its tariff application on 2 August 2024, as required under its Petroleum Pipelines System operating licence (Licence Number: PPL.p. F3/20/1/2006).
In the submission, Transnet requested an Allowable Revenue of R8.7 billion for 2025/26—an increase of 20.77% over NERSA’s prior decision for 2024/25. That earlier determination set the Allowable Revenue at R8.0 billion, but R0.8 billion was deferred as a Regulatory Asset, leaving R7.2 billion as the basis for setting 2024/25 tariffs.
For the 2026/27 period, Transnet again requested R8.7 billion, which would represent a marginal 0.21% decrease from the previous year.
Had NERSA granted this request in full, it would have resulted in a 13.34 cents per litre increase in the Durban-to-Alrode tariff for 2025/26, followed by a 0.58 cents per litre decrease in 2026/27.
In reaching its decision, the Energy Regulator stated that it considered several key factors, including public interest, regulatory stability, and:
- Incidents of pipeline tampering and fuel theft
- The Multi-Product Pipeline (MPP) Project
- Market analysis comparing fuel transport options
- Volume Risk Sharing
- Economic Impact Assessments
- The need to smooth tariff changes over time
NERSA noted, “These issues are discussed in full in the Decision and the Reasons for Decision (RfD) document, which will be made available on our website (www.nersa.org.za) once confidential information has been reviewed and finalised.”
NERSA also reiterated that pipelines remain the most cost-effective method of transporting petroleum products from coastal to inland areas, especially when compared to road and rail.
This is particularly important in light of ongoing road infrastructure strain and recent accidents involving fuel tankers. The regulator confirmed it will continue monitoring the shift from road and rail to pipelines.
However, NERSA also expressed concern over criminal activity, specifically pipeline tampering aimed at fuel theft. These acts, it warned, not only cost the country financially but have also resulted in the loss of lives. The regulator stressed that stricter enforcement of municipal bylaws could go a long way in addressing this growing issue.
For the average South African, the newly approved tariffs will have a direct impact on daily life.
With fuel prices set to increase by 5.23 cents per litre in 2025/26 and a further 3.80 cents per litre in 2026/27, both personal and public transport users can expect to feel the pinch. This, in turn, is likely to drive up the cost of goods and services, as higher fuel costs affect supply chains—adding more pressure to household budgets, particularly among low- and middle-income earners.
Beyond the price hikes, these changes also highlight broader infrastructure and security challenges, including the need to reduce theft and ensure the safety and efficiency of the fuel transport system. For many, this could mean cutting back on non-essential spending or rethinking household budgets altogether. And while the shift to pipeline transport may offer long-term benefits, South Africans will be watching closely for signs of stability and economic relief down the line.
What are your thoughts on the approved fuel tariff increases? Let us know in the comments below.
Comments 1
It is clear that not much (if any) thought was put into the impact this will have on the public in general. It is just so much easier to pass it on than to get govt expenditure in order. How much thought went into enhancing and improving earning capability in the country? Taking from the poor to give to the rich.