Speaking to media, Mashudu Sinthumule, deputy director of fuel pricing mechanisms at the department, said that when the pipeline could no longer transport fuel products from the coast to the in-land, the department introduced the Incremental Inland Transport Recovery System (IITRS) Levy in 2008, which compensated oil companies that used alternative routes to transport fuel.
“To bring the product in by road is much more expensive than bringing it through the pipeline. The cost of bringing it by road was three cents extra,” he said.
In 2012, Transnet started to commercialise the New Multi-Product Pipeline [NMPP] which enables the pipeline to carry all grades of petrol, diesel and jet fuel, making it a full multi-product facility.
“The delay was there from 2012 for not terminating the three cents because we were trying to pay off the backlog of the monies owed to oil companies. The decision was taken that it should be terminated and this will be implemented on 2 April 2014,” said Sinthumule.
The termination of the IITRS levy of three cents per litre applicable in the price structures of petrol and diesel with effect from 2 April has been approved.
Director of the fuel pricing unit at the department, Robert Maake, said that what consumers need to understand is that in addition to the adjustment to the basic fuel price, the department will adjust the transport cost – both the pipeline transport cost and road transport cost.
In March, the petrol price rose by 36 cents a litre. Currently a litre of 95 ULP costs R14.32 in Gauteng.