Pipeline tariff will hurt Gauteng motorists

Transnet’s proposed tariff increase to cover the cost of building a new oil pipeline from Durban to Gauteng will hurt the province’s motorists, BP Africa said on Wednesday.

Chief executive Sipho Maseko told a press briefing in Johannesburg that while BP supported the increase in pipeline capacity, it believed the proposed 300% tariff increase would have a negative impact on both the industry and on Gauteng’s economy.

Challenging the legality of what had been proposed, Maseko said it contravened the Pipelines Act.

He stressed, however, that BP was not against building the new pipeline, but rather opposed the proposed method of funding it.

“The new pipeline will be the most expensive in the world—four times higher that the European equivalent, almost seven times more expensive than the United States, for example, and double the Trans-Alaskan pipeline, which traverses some of the most difficult terrain on the planet and is double the distance,” Maseko said.

“If approved, Gauteng motorists will pay an average of 39 cents a litre more [for petrol] over the next two years.

“What we find extraordinary as well is that 75% of the new tariffs will not even reach Transnet, but will accrue to the inland refiners in what amounts to a direct subsidy courtesy of the inland Gauteng motorists, adding up to a windfall of between R2-billion and R5-billion in the next three years.”

Maseko said the increases would be inflationary, destroy jobs, negatively impact the national gross domestic product and reduce South Africa’s global competitiveness.—Sapa

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