AGGREGATED RESULTS ONGAS PRICES FOR 2010 FOR CATEGORIES OF CUSTOMERS IN GAUTENG, FREE STATE, KWAZULU-NATAL AND MPUMALANGA PROVINCES.

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1 ENERGY REGULATOR OF SOUTH AFRICA In the matter regarding AGGREGATED RESULTS ONGAS PRICES FOR 2010 FOR CATEGORIES OF CUSTOMERS IN GAUTENG, FREE STATE, KWAZULU-NATAL AND MPUMALANGA PROVINCES. Reasons for Decision 1. The decision 1.1 On 06 July 2011, the Energy Regulator approved the aggregated results for average gas prices charged by Sasol Gas Ltd in 2010 to various categories of customers in Gauteng, Free State, KwaZulu-Natal and Mpumalanga Provinces. The summary of the average prices is shown in Table 1 below: Table 1: Aggregated results for the various categories of customers in Gauteng, Free State, KwaZulu-Natal and Mpumalanga Average Price ( R/GJ ) Annual consumption KwaZulu- Gauteng Free State Natal Mpumalanga Class 1 Less than 400 GJ pa R * R * Class GJ pa to GJ pa R R R R Class GJ pa to GJ p.a R R R R Class GJ p.a to GJ p.a R R R R Class GJ p.a to p.a R * R R Class 6 > GJ p.a R N/A * * * This category has fewer than 3 customers and therefore the average price will not be published as per regulation Page 1 of 7

2 1.2 The Energy Regulator also approved the publication of a notice to inform stakeholders that the approved aggregated results for averaged gas prices charged in 2010 have been published on the NERSA s website. 2. Applicable Law 2.1 The legal basis for the determination of aggregated prices is derived from the piped-gas regulation (published on 07 April 2001, under GNR.321 in Government Gazette 29792) (piped-gas regulations), piped-gas regulation 4(11). 2.2 In terms of the piped-gas regulation 4(11), NERSA is obliged to publish aggregated results of piped gas prices for each calendar year for categories of gas customers defined in sub-regulation (5) on a provincial basis. 2.3 Sub regulation 5 defines the following classes of customers as classified by their annual gas consumption in Gigajoules: CLASS ANNUAL GAS CONSUMPTION Class1 Class2 Class3 Class4 Class5 Class6 Less than 400 GJ pa 401 GJ pa to GJ pa 4001 GJ pa to GJ pa GJ pa to GJ pa GJ pa to pa > GJ pa 2.4 Furthermore, regulation 4 (11) (c) to (d) provides that the Energy Regulator may not release information pertaining to individual customers if such information is protected in terms of the Promotion of Access to Information Page 2 of 7

3 Act and there must be at least three gas customers in a given category for a price to be published. 3. Analysis 3.1 In terms of piped-gas regulation 11, the following must be done in order to promote price transparency and prevention of price discrimination: (a) trading licensees must provide the Gas Regulator with the annual volume and average price for that year for each of its customers consuming less than 10 million gigajoules per annum within three months of the end of each calendar year. (b) the Gas Regulator must publish aggregated results for categories of customers namely residential, commercial and industrial on a provincial basis. (c) the Gas Regulator may not release information pertaining to individual customers if such information is protected in terms of the Promotion of Access to Information Act; (d) there must be at least three customers in a given category for a price to be published. 3.2 Sasol Gas Ltd provided the Energy Regulator with the information required by regulation 4(11) (a) to enable the Energy Regulator to calculate the aggregated results. 3.3 The following inaccuracies were identified in the pricing data submitted by Sasol Gas Ltd; (a) Some customers were recorded with negative gas volume consumption due to billing corrections. (b) Some customers were recorded with zero gas volume consumption, but revenues were generated. This is due to take or pay obligations. Page 3 of 7

4 (c) In order to deal with the above inaccuracies, all volumes of consumption which were recorded as negative volume were not included in the calculations of the aggregated results. In addition, customers with zero consumption were also not included in the calculations. Determination of the aggregated results 3.4 The aggregated results of piped-gas prices were calculated as follows: (a) (b) (c) (d) Customers were sorted according to provinces; For every province, customers were categorised into different volume categories according to the order of gas consumption; The sum of the total gas volume consumption per category and sum of total gas sales was calculated; The sum of the total gas sales was divided by the sum of the total gas volume for each category of the provinces to establish the average price per customer per annum. 3.5 It must be pointed out that, based on the pricing data at our disposal, Sasol Gas Ltd does not have customers in the following provinces: Western Cape, Eastern Cape, Limpopo and North West. Page 4 of 7

5 4. Conclusion 4.1 NERSA concluded that the aggregated results (i.e. average gas prices for 2010) for the categories in Gauteng, Free-State, KwaZulu-Natal and Mpumalanga provinces are as provided in Table 1 below; Table 1: Aggregated results for the various categories of customers in Gauteng, Free State, KwaZulu-Natal and Mpumalanga Annual consumption Average Price ( R/GJ ) Free Gauteng State KwaZulu -Natal Mpumalanga Class 1 Less than 400 GJ pa R * R * Class GJ pa to GJ pa R R R R Class GJ pa to Class GJ pa to Class GJ pa to Class 6 > GJ GJ pa R R R R GJ pa R R R R GJ pa R * R R pa R N/A * * * This category has fewer than 3 customers and therefore the average price will not be published as per regulation Page 5 of 7

6 GLOSSARY OF TERMS AS PER GAS ACT, 2001 (No. 48 OF 2001) Consumer Means a person who uses gas except for those who purchase gas from a reticulator Distribution Means the distribution of bulk gas supplies and the transportation thereof by pipelines with a general operating pressure of more than 2 bar gauge and less than 15 bar gauge or by pipelines with such other operating pressure as the Gas Operator may permit according to criteria prescribed by regulation to points of ultimate consumption and reticulation systems, or both points of ultimate consumption and reticulation systems and any other activity incidental thereto, and distribute and distributing have corresponding meanings Gigajoules (GJ) A metric term used for measuring energy use. 1(one) GJ is equivalent to the amount of energy to the amount of energy available from 26.1 m 3 of natural gas Licensee Means a person holding a license granted by the Energy Regulator in terms of the Gas Act of 2001 Price Means the charge for gas to a distributor, reticulator or final customer Residential Means household use of gas Regulation Means a regulation made under section 34 (1) Page 6 of 7

7 ABBREVIATIONS 1. GJ Gigajoules 2. pa per annum 3. R Rand 4. R/GJ Rand per gigajoule Page 7 of 7