LPG wholesale, storage license and pricing
Under Petroleum Products Act, a wholesale license is required to buy and sell bulk LPG – visit www.energy.gov.za for licencing requirements.
Under Petroleum Pipelines Act, a Storage License from NERSA for the construction and operation LPG facilities – visit www.nersa.org.za/petroleum-pipelines for licencing requirements.
Under Petroleum Products Act, the price of LPG is regulated at Maximum Refinery Gate Price (MRGP) and Maximum Retail Price (MRP).
- MRGP is the maximum price at which a refinery is permitted to market LPG for consumption within South Africa. It is an import landed cost, calculated based on Import parity pricing.
- MRP is the maximum retail price of LPG set for the supply of LPG to residential customers. MRP attracts VAT at 15%.
Summary:
In May 2022 the Department of Mineral Resources and Energy (DMRE) published the Roll-Out Strategy on LPG, with the objectives as follows,
- To promote access to safer, cleaner, more efficient, environmentally friendly and affordable thermal fuel for households.
- To encourage households to switch from the use of biomass, coal, electricity and illuminating Paraffin to LPG for thermal purposes.
- To contribute to energy efficiency and demand side management (EEDSM) by minimizing the use of electricity for cooking and space heating.
- To enhance the level and quality energy services currently available to households throughout South Africa
- To contribute to green economy programs of government which are aimed at reducing greenhouse gas emissions
