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South African fuel retailers eye trucks over pipeline as Transnet tariffs rise

David Ijaseun by David Ijaseun
May 13, 2025
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South African fuel retailers eye trucks over pipeline as Transnet tariffs rise
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Fuel retailers in South Africa are increasingly turning to road transport over pipelines to move fuel inland as tariffs on the country’s main fuel pipeline surge, straining businesses already hit by sluggish demand and rising costs.

Transnet, the state-owned logistics company, implemented an 8.7% tariff hike on April 1 for its 555-kilometer pipeline linking Durban to Gauteng, home to Johannesburg, South Africa’s economic hub. An additional 5.7% increase is expected in the next financial year, making the traditional pipeline route less financially viable for suppliers.

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For fuel distributors, the rising costs mean trucking may soon become the more economical choice.

“It just makes sense; it’s quicker and the cost is almost the same,” said Avhapfani Tshifularo, CEO of the Fuels Industry Association of South Africa, whose members include BP, Shell, and TotalEnergies.

The shifting preference toward trucking comes as Transnet struggles to regain operational efficiency after years of corruption and underinvestment crippled its once-dominant logistics operations.

Pipeline tariffs climb as volumes drop

While the Durban-Gauteng pipeline has historically carried about 85% of inland market fuel, it’s now under pressure from falling volumes. According to its latest annual report, Transnet’s pipeline division missed volume targets by 11% in 2024 despite increased revenue during the same period.

Tshifularo warned that as volumes continue to decline, tariffs are likely to keep rising, creating a vicious cycle that pushes more retailers off the pipeline and onto roads.

According to Daan Joubert, managing director at Auto Commodities and Payloads, a major concern for businesses is the combined cost of using the pipeline and then trucking fuel to final destinations, which is around 33% higher than trucking directly from coastal depots.

“Lower pipeline tariffs could boost the economy, especially inland, due to reduced fuel pricing,” Joubert said.

Imports rise as refining capacity falls

South Africa’s reliance on fuel imports is deepening amid declining domestic refining capacity. The nation’s fuel consumption has fallen to its lowest levels since 2020, with diesel demand already dropping and gasoline usage set to decline further due to more fuel-efficient vehicles.

Transnet Pipelines acknowledged the concerns and said it is finalizing a study on fuel demand, infrastructure constraints, and logistics to identify cost-reduction opportunities and revive pipeline volumes.

“The ultimate goal is to reduce long-term logistics costs,” the company said in a written response.

Initially upgraded in 2012 to reduce road congestion by moving more fuel through pipelines, the Durban-Gauteng corridor is now at risk of reversal, as businesses weigh speed and cost parity between pipelines and trucks.

Strategic crossroads for fuel logistics

South Africa, the continent’s most industrialized nation, is at a logistical crossroads. Trucking could offer temporary relief for businesses burdened by rising costs. But analysts warn that a sustained shift away from pipelines could worsen road congestion, carbon emissions, and infrastructure wear.

For now, the economics are driving the decision. “If prices keep rising, we’ll see even more companies ditch the pipeline,” Tshifularo concluded.

Read more on Supersonic sharkskin tech could save aviation billions in fuel, cut emissions

Tags: Around Africafuelfuel retailersHeadlineSouth Africa

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