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Transnet Pipelines 2013/14 tariff Decision

Transnet Pipelines 2013/14 tariff Decision. Presentation to Parliamentary Portfolio Committee on Energy 27 th March 2013. Transnet has a network of 32 Pipelines Approx 3,800km of pipelines. Transnet NMPP project. Transnet: 24” Durban to Gauteng + other

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Transnet Pipelines 2013/14 tariff Decision

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  1. Transnet Pipelines2013/14 tariff Decision Presentation to Parliamentary Portfolio Committee on Energy 27th March 2013

  2. Transnet has a network of 32 Pipelines • Approx 3,800km of pipelines

  3. Transnet NMPP project • Transnet: 24” Durban to Gauteng + other • Running more than 3 years late. Not complete yet • Scheduled completion Q3 2010 – latest Q4 2013 • Cost escalations: • Initial estimate R9.5bn • 2007 R 11 bn • 2009 R 12.6 bn • 2010 R 15.4 bn • 2010 R 23.4 bn • next ???? • NMPP = big influence on tariffs • “User pays” policy - motorists carry the bigger burden. Budget speech – no mention of further help • Minister of Public Enterprises commissioned investigation. • NERSA starting a prudency review of NMPP

  4. `

  5. Public consultation on tariffs

  6. Decision: Allowable Revenue • Transnet application: + 22.6% • NERSA: + 8.5%

  7. Notable “issues” in this application • Single year tariff application instead of multi-year • Large clawback • Decline in volumes – total network volumes decline

  8. 2013/14 Application vs. NERSA

  9. 11

  10. Impact on inland petrol price ULP 93 Decision 1.4 c/l 12

  11. Petrol price structure Small business Job creation 26c/l • Cost drivers: • Accident rate • Admin costs 13

  12. Pipeline Volumes • Lower volumes = higher tariffs = higher inland fuel prices • NERSA concerned Transnet annual report for 2011/12: 7.1% reduction in total volumes

  13. Decline in volumes Transnet Pipeline Volumes trended monthly Refined Dbn - Gauteg Crude Inland Network Total System 600 1,600 1,400 550 1,200 500 1,000 Litres 450 800 600 400 400 350 200 300 -

  14. Decline in volumes Possible reasons: • Price regulation: • Incremental Inland Transport Cost Recovery Levy; • Revised service differential in petrol price regulation - unintended consequence; • Oil companies: changing procurement and marketing strategies; • Market/Transnet: Increased demand for niche products not transported in pipelines; • Economy: lower/flat growth in fuel demand.

  15. NERSA collaborating with DoE to see what, if anything, can be done • Transnet forecast 4.6% increase in volumes in 2013/14

  16. Thank You www.nersa.org.za

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