Fuel pipeline tariff hike will cost economy R1bn, says BP

2011-04-01 11:09

The almost 60 percent fuel pipeline tariff increase could cost the economy R1 billion a year and lead to 40 000 job losses, BP said today.

“The cost to the economy could be up to R1 billion annually and conservative estimates are that 40 000 jobs will be lost with the National Energy Regulator of SA’s (Nersa) pipeline tariff increase of 59.9 percent,” BP said in a statement.

Business Day reported yesterday that Nersa had granted Transnet the increase to its petroleum pipeline tariffs to help pay for a new pipeline.

The new pipeline will replace the current ageing link between refineries in Durban and Gauteng, and will significantly increase the amount of fuel pumped up to Gauteng from the coast.

BP said the increase would result in South Africa’s tariffs being among the highest in the world.

“Our analysis shows that these tariffs exceed the global average by over 400 percent,” said Sipho Maseko, BP South Africa CEO.

“At these high input cost levels, business viability is at stake and will inevitably lead to major job losses in Gauteng.”

He said Nersa said the increase in the petrol price resulting from the higher tariffs would only make up a small fraction of the gross domestic product of inland provinces.

This “suggests that they view the magnitude of the increase to be insignificant”.

“However, their own figures show 40 000 job losses, which is very significant,” he said.

BP wanted the local pipeline tariffs to be benchmarked against those in other parts of the world.

“Nersa’s disregard for this request violates many of the Act’s objectives, which include promoting the efficient, effective, sustainable and economic distribution of petroleum and the promotion of access to affordable petroleum products.”

BP called on Nersa to review the implications of the tariffs “given its comparison with global benchmarks and the consequent implications for the competitiveness of the regional and South African economies”. 

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.