By Faith Jemosop

South African motorists are bracing for confirmed fuel price increases after the National Energy Regulator of South Africa (NERSA) approved higher petroleum pipeline tariffs for the 2025/26 and 2026/27 financial years. 

The decision, announced on April 15, 2025, will result in fuel price hikes of 5.23 cents per litre in 2025/26 and an additional 3.80 cents per litre in 2026/27.

The tariff adjustments stem from NERSA’s approval of Transnet’s allowable revenue for operating the Petroleum Pipelines System. Transnet had initially applied for a 20.77% increase in allowable revenue for 2025/26, aiming to raise it to R8.71 billion. However, NERSA granted a more moderate increase of 8.73%, setting the allowable revenue at R7.84 billion for 2025/26 and projecting a further 5.71% rise to R8.29 billion in 2026/27.

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The pipeline tariffs serve as a proxy for the cost of transporting fuel from coastal refineries in Durban to inland areas like Johannesburg. These tariffs are a component of the fuel price structure and are typically passed on to consumers.

NERSA considered several factors, including public interest, economic impact assessments, and the need to smooth the tariff trajectory. The regulator also took into account issues such as volume risk sharing, the Multi-Product Pipeline project, and incidents of pipeline tampering and product theft.

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While the approved increases are lower than Transnet’s initial request, they still represent a significant rise in fuel prices. The adjustments are expected to impact consumers, particularly those in inland regions where fuel transportation costs are higher.

The fuel price hikes come amid broader concerns about the cost of living in South Africa. Earlier this year, NERSA approved a 12.7% electricity tariff increase for Eskom, which was also lower than the utility’s requested 36% hike but still substantial.

These developments underscore the challenges facing South Africa’s energy sector, as regulators attempt to balance the financial sustainability of state-owned enterprises with the economic pressures on consumers.