The National Energy Regulator of South Africa (Nersa) has announced that it has considered and approved Sasol Gas’s application for maximum gas prices for the 2027 and 2028 financial years.

Nersa, however, decided to defer its final consideration of Sasol Gas’s application for maximum gas prices for the 2028/29 and 2029/30 financial years.

For end-user customers, Nersa approved a maximum gas price of R97.31/GJ for the first quarter of the 2026/27 financial year.

For traders and resellers, Nersa approved a maximum price of R92.44/GJ for the first quarter of the 2026/27 financial year, reflecting the minimum 5% discount from the maximum end-user price.

To provide for changes in underlying gas acquisition costs, Nersa approved the continued application of the quarterly adjustment mechanism until March 31, 2028, in accordance with the approved cost-plus methodology and based on actual underlying gas acquisition costs and volumes.

The approved maximum gas price is subject to adjustment principles contained in the abovementioned methodology.

The price adjustments will be implemented with a three-month lag and will be closely monitored and verified using relevant economic and acquisition cost data to ensure affordability, sustainability and efficiencies, Nersa assures.

As an additional safeguard for customers, where the application of the adjustment mechanism would result in an increase of more than 10% in the approved maximum gas price in any quarter, Sasol Gas may not implement the adjustment without first obtaining written approval from Nersa.

This ensures that significant increases in the maximum gas price remain subject to additional regulatory scrutiny, Nersa explains.

The approved maximum price is exclusive of value-added tax and will remain effective from July 1 this year until Nersa approves another maximum price.

“The decision comes at an important time for the South African gas market, given the anticipated decline in gas volumes from Mozambique, commonly referred to as the ‘gas cliff’, and the transition towards methane-rich gas as an alternative gas source.

“The changing gas supply environment has implications for gas acquisition costs, supply volumes and the prices ultimately paid by customers,” Nersa says in a statement.

‘Nersa’s decision therefore seeks to provide regulatory certainty during this transition while ensuring that costs recovered through regulated prices are adequately supported and appropriately treated under the approved methodology,” Nersa Piped-Gas Regulation full-time regulatory member Nomfundo Maseti explains.

Nersa says it will continue with the regulatory process concerning the adequacy of competition in the relevant gas market.

The outcome of this process will inform the consideration of maximum prices for the remaining periods of Sasol Gas’s application.