Sasol wins R4bn legal battle against Transnet over tariff dispute

SIU

Cape Town —  Sasol has secured a significant legal victory against state-owned logistics utility Transnet, winning almost R4 billion in damages over a longstanding tariff dispute.

Transnet transports crude oil for Sasol and Total Energies through Transnet Pipelines, from the crude oil refineries in Durban to the Natref refinery in Sasolburg in the Free State. In 2017, Sasol Oil joined Total Energies in initiating legal action against Transnet for damages caused by a breach of its obligation to set pipeline tariffs for crude oil transportation, BusinessTech reported.

The litigation spanned years, and involved the High Court, Supreme Court of Appeal, and the Constitutional Court. Following proceedings at the High Court between April and May 2024, the court ruled in favour of Sasol Oil and Total Energies. The court ruled that Transnet owed R3.9 billion worth of damages and a further R2.3 billion in interest awarded to Sasol Oil.

According to TimesLIVE, Sasol Oil welcomed the ruling, while Transnet and Total Energies were not available at the time. The dispute dates back to a 1967 agreement between the government at the time, and Total. Together, an inland crude oil refinery was established when the coastal refineries were struggling.

To ensure Total’s participation in the Natref refinery, the government instituted the pipeline tariff structure. Sasol, originally set up as a state-owned business in 1950 and privatised in 1979, owns 63.64% of Natref, with Total Energies holding the rest.

This ruling marks a pivotal moment in the ongoing legal saga, highlighting the complexities and challenges associated with historical agreements and the evolution of South Africa’s energy sector.

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Compiled by Matthew Petersen

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