pipeline a threat

Kea' Modimoeng

Kea' Modimoeng

The proposed increase in transport tariffs by Transnet to fund its new pipeline project could result in the loss of more than 21000 jobs, BP Africa said yesterday.

The oil company came out against the proposed tariff hike in the existing Durban to Gauteng pipeline, which will be used to cover the cost of building Transnet's new oil pipeline.

The pipeline project, estimated at R12,7billion, is being built to address the demand of fuel in the inland areas and will run from the coast to Johannesburg and Pretoria.

Sipho Maseko, chief executive of BP Africa, said while his company supported an increase in pipeline capacity, it believed the proposed tariff increase would have repercussions on the oil industry and on Gauteng's economy.

BP and its economists have calculated the tariff increase at a staggering 300percent, but Transnet insisted yesterday that the hike would only be 82.5percent.

Maseko said: "BP is not against the building of a new pipeline but against the proposed method of funding it.

"The new pipeline will be the most expensive in the world, four times higher that the European equivalent, almost seven times more expensive than the US. If approved, Gauteng motorists will pay an average of 39 cents a litre more over the next two years."

Transnet spokesman John Dludlu said: "We have requested an increase to our petroleum pipeline tariffs of 82.5percent, not 300percent as alleged.

"Based on the existing tariffs, an 82.5percent increase will translate into an increase of approximately 10 cents per litre for the use of the trunk line between Durban and Gauteng."