Johannesburg - The manufacturing sector is concerned about the effect of Nersa's determination of natural piped gas prices on manufacturing, the Manufacturing Circle (MC) said on Thursday.
“There are also concerns that these issues may not be addressed going forward in light of the manner in which the Gas Amendment Bill is progressing,” executive director Coenraad Bezuidenhout said in a statement.
He said business had raised concerns about the National Energy Regulator of SA's (Nersa) determination on an application by Sasol earlier this year to charge maximum prices for natural piped gas.
Key concerns regarding Nersa's methodology related to the basket of energy alternatives against which the price for natural piped gas was determined, instead of the cost to exploit the resource, Bezuidenhout said.
This resulted in the possibility of large profits for Sasol undermining the competitiveness of local industry.
“Manufacturing would like to see a dispensation that promotes affordable access, fair profits and greater competition in the gas sector,” he said.
“In light of the present situation, it is also essential that the regulatory framework be strengthened to include administrative recourse for industry on the Nersa determinations.”
The only way to get decisions reviewed at the moment was through the courts.
As a result, the MC asked on Wednesday for a meeting with Parliament's portfolio committee on energy to discuss gas prices.
This was so it could make a presentation on energy issues and their impact on manufacturing.
The MC also wanted to discuss the implementation of the electricity pricing policy, especially in respect of municipal charges on electricity, and the security of electricity supply.
Supply security was especially pertinent for fast moving consumer goods processors and manufacturers employing injection moulding processes. - Sapa