South Africa Reduces Gas Price Cap, Easing Costs for Energy-Intensive Industries

South Africa’s National Energy Regulator (NERSA) has approved a 6% reduction in the maximum price of gas supplied by Sasol Gas, the Sasol subsidiary responsible for transporting, marketing, and distributing natural gas.

The revised tariff, effective for the third quarter of the 2025–2026 fiscal year—from January to March 2026—lowers the gas price cap from 90.57 rand per gigajoule (approximately $5.30) to 85.10 rand per gigajoule (around $4.98), according to local reports on Monday, November 17.

NERSA attributed the reduction to declining supply costs driven by fluctuations in oil prices, changes in the rand exchange rate, and production expense adjustments. The adjustment follows the regulator’s quarterly tariff review, which requires Sasol Gas to submit comprehensive cost and volume data, including imports from Mozambique.

The move is expected to provide relief to South Africa’s energy-intensive sectors, which remain heavily reliant on gas. The petrochemical industry, a key contributor to the country’s industrial base, sources roughly 85% of its energy from gas, according to a 2022 Department of Mineral Resources and Energy (DMRE) report. Other sectors such as cement, metals, glass, and food processing similarly depend on gas to operate furnaces and high-temperature equipment, where alternative energy sources are limited.

Sasol’s Secunda complex alone consumes an estimated 120 million gigajoules of gas annually, illustrating the scale of demand. The NERSA-approved reduction comes as welcome relief amid persistent energy cost and supply challenges, offering industrial users a measure of financial and operational stability.