Sasol Gas faces prosecution for gas price gouging

The Competition Commission has referred Sasol Gas to the Competition Tribunal for prosecution for selling natural gas to customers at prices marked up by up to 72% for almost a decade.

The investigative and enforcement authority confirmed that it had referred the complaint against Sasol Gas to the Tribunal on Monday.

In the commission’s statement issued on Tuesday, the body added that the case requires the tribunal’s urgent attention and should be resolved expeditiously to prevent further delays for the complainants.

According to the commission, three complainants, namely gas traders Egoli Gas and Spring Lights Gas, together with the Industrial Gas Users Association of South Africa (IGUA-SA) lodged a price gouging complaint against Sasol Gas in early 2022. They alleged the company contravened the Competition Act.

“Sasol Gas is the only supplier of natural piped gas in South Africa and supplies gas to gas traders and end-users in the country through a network of transmission and distribution pipelines,” the commission said.

“Sasol Gas sources natural gas from the Pande and Temane gas fields in Mozambique through an 865km long pipeline that transports the gas from Mozambique to Secunda. Publicly available information indicates that the Pande and Temane gas fields in Mozambique are likely to start declining in 2025 and are likely to be depleted between 2029 and 2030.”

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Investigations by the commission on the matter found that Sasol Gas charged IGUA-SA members and Egoli Gas an excessive mark-up of 55% and 72%, respectively, over a nine-year period starting in 2014, while Spring Lights Gas was charged an excessive mark-up of 59% between 2018 and 2022.

“The Commission also found that Sasol Gas’ excessive pricing to gas traders and industrial customers ultimately affected the pricing to the end consumers, as gas traders and industrial customers generally pass these costs to consumers.”

The commission is of the view that Sasol Gas’ pricing behaviour remains an ongoing issue.

Further, the commission notes that Sasol Gas did not provide it with the relevant information to assist with its investigations, but rather the company opted to file a review application in the Competition Appeal Court (CAC) in an effort to challenge the commission’s right to investigate the complaints lodged against it.

“The Competition Act only affords the Commission a period of one year to investigate a complaint lodged by a member of the public unless extended by the complainant,” the commission noted in response to Sasol Gas’s review application.

“In this case, the one-year period has already lapsed, and one of the complainants has indicated that it is not amenable to granting any further extension pending Sasol Gas’ jurisdictional challenge in the CAC,” the authority added.

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