The National Energy Regulator of South Africa (NERSA) has approved Sasol Gas’s application for maximum gas prices covering the 2026/27 financial year and part of the 2027/28 financial year. The decision covers the period from July 1, 2026, to June 30, 2027, followed by the period from July 1, 2027, to March 31, 2028.

For end users, the maximum approved price is R97.31 per gigajoule for the first quarter of 2026/27. Traders and resellers face a maximum price of R92.44/GJ, reflecting the minimum 5% discount required from the maximum end-user price. The approved prices exclude VAT and remain effective from July 1, 2026, until NERSA approves a subsequent maximum price.

Quarterly Adjustments Could Limit Price Volatility

NERSA has also approved a quarterly adjustment mechanism through March 31, 2028. The mechanism will operate under the regulator’s approved Cost Plus Methodology and will be based on Sasol Gas’s actual underlying gas acquisition costs and volumes.

Price adjustments will be implemented with a three-month lag and subject to monitoring and verification using relevant economic and gas acquisition data. The framework is intended to support affordability, sustainability and efficiency while ensuring that prices reflect developments in the regulated gas market.

A further safeguard applies if the mechanism would result in an increase of more than 10% in the approved maximum gas price during any quarter. In that situation, Sasol Gas must obtain written approval from NERSA before implementing the increase. This creates an additional layer of protection for customers against abrupt price increases.

Gas Market Faces Structural Changes

The regulatory decision comes as South Africa’s gas market prepares for potentially significant changes to gas supply. NERSA noted that the sector is experiencing declining gas volumes from Mozambique, commonly referred to as the gas cliff, alongside a transition toward methane-rich gas as an alternative source.

These changes could place pressure on acquisition costs, available supply and ultimately the prices paid by customers. For industrial users that rely heavily on gas, the direction of these costs will remain an important consideration for operating expenses and longer-term investment decisions.

Regulatory Oversight Remains Critical

NERSA said the decision is designed to provide regulatory certainty while ensuring that customers receive appropriately supported prices under the approved methodology. The regulator will also continue examining the adequacy of competition in the relevant gas market.

The outcome of that competition review could influence NERSA’s future consideration of maximum gas prices for the remaining period covered by Sasol Gas’s application. As supply conditions evolve, investors and industrial consumers will therefore be watching both the quarterly adjustments and the broader regulatory response to South Africa’s changing gas landscape.