Sasol Gas is under prosecution by the Competition Commission for marking up natural piped gas prices by as much as 72%.
Referring to a complaint against the company on Monday the 10th of July 2023, the Competition Commission has revealed that Sasol has charged excessive prices on natural gas for almost a decade.
This is not the first time that there has been a complaint against Sasol since there were three complaints that were lodged in early 2022, so the Competition Commission’s assessments said IGUA-SA members were charged a markup of 55% between 2014 and 2022;
Egoli Gas was charged a markup of 72% between 2014 and 2022; and,
Spring Lights Gas was charged a markup of 59% between 2018 and 2022.
“The Commission also found that Sasol Gas’ excessive pricing to gas traders and industrial customers ultimately affected the pricing to the end consumers, as gas traders and industrial customers generally pass these costs to consumers,” the commission added.
Egoli Gas and Spring Lights Gas are traders, while IGUA-SA’s members are industrial gas customers. “The Competition Commission has on Monday, 10 July 2023, referred a complaint against Sasol Gas (Pty) Ltd for excessive pricing of natural piped gas to the Competition Tribunal in contravention of section 8(1)(a) of the Competition Act 89 of 1998, as amended,” – the commission said. It added by saying that the Commission found that Sasol Gas extracted markups of up to 72%. The excessive pricing has continued for almost a decade and is ongoing.
The Commission said the Competition Act only affords the Commission a period of one year to investigate a complaint lodged by a member of the public unless extended by the complainant. “In this case, the one-year period has already lapsed, and one of the complainants has indicated that it is not amenable to granting any further extension pending Sasol Gas’ jurisdictional challenge in the CAC.” – it added.
The Commission said under these circumstances, it had a duty to refer the complaint to the Tribunal for prosecution before it lapses.
Natural gas is used by a broad range of customers, including domestic, industrial, and commercial since it is an alternative energy source to electricity, and it seems Sasol Gas holds a monopoly in South Africa right now.
The Competition Commission also revealed that Sasol Gas is the only supplier of natural piped gas in South Africa and supplies gas to gas traders and end-users in the country through a network of transmission and distribution pipelines.
However, Sasol’s spokesperson said they have yet to formally receive the complaint referral. “Once Sasol Gas has had an opportunity to consider the referral, we will respond as appropriate,” it said.
Between 1 September 2021 and 30 June 2022 Sasol said the maximum gas price period was R68.39/GJ. The company said “Sasol Gas has challenged the Commission’s jurisdiction to investigate the gas pricing complaints on the basis of [energy regulator] Nersa’s regulatory powers under the Gas Act.”
“This jurisdictional challenge is the subject of a legal review application currently pending before the Competition Appeal Court, the outcome of which will determine the ability of the Commission to investigate the gas pricing complaints that are the subject of the complaint referral made on 10 July 2023.”
