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Dominance of Sasol leads to high gas prices

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Sasol Gas’ exclusive rights to imported gas supplies and its dominance of the industrial gas market in South Africa has led to the country being ranked as one of the world’s most expensive gas markets, according to a new study released by US-based cost control firm NUS Consulting Group.

The survey indicated the price of gas in South Africa had increased between 3.2% and 7.5% in the past year for various volumes and types of usage, with a lack of competition not helping the situation in the country.

Stephan Dolk, the group’s general manager, commented, “The increases were imposed on top of the previous 2 years’ hefty price hikes, which amounted to more than 25% each year, making the increase over the past 5 years close to a massive 150% for users taking an annual supply of 100,000 therms.”

“In the absence of any competition, Sasol Gas adopts a volume pricing mechanism for its gas supplies linked to international oil prices. The company maintains that by applying these indices, its gas pricing is fair and represents market conditions,” Dolk concluded.

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