NERSA Seeks Broader Powers to Regulate South African Gas Prices

The National Energy Regulator of South Africa (NERSA) is pushing for wider powers to regulate gas prices in the country. According to NERSA's submission to Parliament, the existing framework leaves customers vulnerable to monopoly pricing.

NERSA Full-Time Regulator Member Nomfundo Maseti argued that the current 'light-handed' approach, which only approves rather than sets maximum prices, limits its ability to constrain dominant suppliers. She emphasized that where there is no competition, some customers are exposed to exploitative pricing and excessive charges.

The Gas Bill's proposed provisions would empower NERSA to set maximum gas prices, regulate distribution tariffs, and extend mandatory third-party access to distribution pipelines and liquefied natural gas (LNG) regasification facilities. Maseti pointed out that gas prices reached R300/GJ in the past but have since dropped to around R87/GJ.

NERSA supports extending tariff regulation and mandatory third-party access to distribution infrastructure, citing natural monopoly characteristics. This could prevent smaller suppliers from reaching customers within an incumbent distributor's exclusive area.