Transnet's multi-product pipeline (MPP) project, which has faced repeated delays, has seen costs balloon by more than R17bn, with completion now expected by November 2027—16 years behind its original 2010 deadline.

The National Energy Regulator of South Africa (Nersa) conducted a major review of Transnet's pipeline tariffs, citing South Africa's growing reliance on imported refined fuels after refinery closures and the termination of the apartheid-era variation agreement.The review highlights the project's escalated costs, from an initial R11.1bn estimate to R28.2bn, and the regulator's push to shield consumers from steep tariff hikes.

Nersa argues that proposed tariff increases would exacerbate inflation, disproportionately affecting low-income households and risking over 18,000 jobs.

The regulator recommends retaining the rolled-in tariff system while introducing differentiated tariffs where material differences exist between pipelines.

The review also underscores the MPP's critical role in supplying 90% of Gauteng's fuel needs and its impact on South Africa's energy infrastructure, with potential GDP contractions and reduced capital formation projected if tariffs are raised.

The article emphasizes the socio-economic implications of the tariff changes, linking them to poverty, income inequality, and economic growth challenges.