South Africa’s economy will face higher prices for gas supplies to Sasol, adding about 325 million rand ($20 million) a month, according to the Fuel Consumers Association.

“The current uncertainty in gas prices poses a risk” to the biggest buyers, the Industrial Gas Consumers Association of South Africa said in a statement on Wednesday, citing a 96% price hike that took effect on August 1.

Sasol supplies the gas it produces in Mozambique through the Rompco pipeline to its own facilities as well as to consumers. South Africa lacks significant gas production and alternative means of importing fuel.

South Africa’s national energy regulator said last week it had been alerted to “imminent excessive gas price increases” by an unnamed licensee and would investigate any unreasonable pricing.

“Sasol Gas recognizes the impact of price increases on customers,” the company said in an emailed statement to the regulator. The price was determined using a methodology approved by Nersa, it said.

© 2022 Bloomberg

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