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The Competition Tribunal has interdicted Sasol from increasing its gas prices for the next six months, unless it gets a nod from the energy regulator, pending the conclusion of a probe into excessive pricing.
Sasol has already agreed to not implement a price increase that sparked an outcry from major industrial users, pending further discussions with the National Energy Regulator of South Africa (Nersa). The chemicals and energy giant is also challenging the jurisdiction of the competition authorities in the matter, with its application being reviewed the Competition Appeal Court.
The tribunal on Thursday announced in a statement it had granted an interim relief application brought by the Industrial Gas Users’ Association of Southern Africa (IGUA-SA), preventing Sasol Gas from increasing the price of piped natural gas above R68.39 per gigajoule.
Natural gas is an essential input for IGUA-SA’s members which include large industrial users of gas in South Africa. In August 2022, Sasol Gas notified its customers that it intended to increase its price for natural gas to R133.34/GJ.
IGUA-SA had lodged a complaint with the Competition Commission alleging that Sasol is abusing its dominant position in the market by charging an excessive price for gas to the detriment of consumers and customers.
The industrial users thereafter approached the tribunal for interim relief. The tribunal adjudicates matters referred to it by the commission, which is the investigative and enforcement body, while the Competition Appeal Court reviews tribunal decisions.
In proceedings before the tribunal Sasol Gas has argued that it is beyond the power of the competition authorities to determine it engaged in excessive pricing, further arguing that its pricing fell within a range determined by Nersa.
The tribunal has, however, concluded that the Competition Act and the Gas Act create a system of concurrent jurisdiction, and that IGUA-SA had shown prima facie that an increase to Sasol Gas’ price for natural gas would result in an excessive price.
"The tribunal therefore effectively placed a moratorium on Sasol Gas’ increase on the price of natural gas for a period of six months or pending the conclusion of the commission’s investigation (whichever occurs first)," the authority said on Thursday.
"Within the six-month period, Sasol Gas may not increase its natural gas price above R68.39/GJ, unless it first gives IGUA-SA at least two months’ written notice of its intention to do so. Such notice must specify the price which Sasol Gas intends to charge its customers, whether that price has been approved by Nersa and, if so, when it was approved."
IGUA-SA's Jaco Human told News24 the impact of that decision is that, while Nersa remains the regulatory body responsible for setting the maximum price for gas, the competition authorities are able to ensure that such pricing is not excessive.
