President Cyril Ramaphosa has ended all the uncertainty that reigned supreme within the energy industry since the formation of the government of national unity executive.
This after two months of speculation about who oversees what function and mandate following the split of energy from mineral resources and the creation of petroleum resources.
When Ramaphosa announced his cabinet at the end of June, he appointed Gwede Mantashe as minister of mineral and petroleum resources, and gave Kgosientsho Ramokgopa the nod to head electricity and energy.
Since then, industry role players and stakeholders have been crying for a speedy clarification of the division of powers.
Drawing the lines
Ramaphosa has since done the right thing by issuing an unambiguous proclamation, drawing the lines between the two.
Mantashe has managed to keep the Central Energy Fund and all petroleum functions. This while Ramokgopa has taken over all nuclear energy functions as well as gas, according to the proclamation.
However, the old department of mineral resources and energy will continue to exist until April under Mantashe’s stewardship.
Ramokgopa will set up an office to take his energy functions in April 2025.
“The Department of Mineral Resources and Energy [DMRE] will continue to exist until the legislation and relevant human and financial resources are transferred.
“The DMRE will then be replaced by two departments: the department of mineral and petroleum resources and the department of electricity and energy.
“As an interim arrangement, the minister of mineral and petroleum resources has been assigned responsibility for DMRE.
“A memorandum of agreement will be entered into to ensure that DMRE provides the necessary support to the minister of electricity and energy for the remainder of the 2024/2025 financial year and until a new department of electricity and energy is established and resourced.”
Regulation of petroleum
In line with the proclamation, legislation such as the one relating to the nuclear energy, national nuclear regulator, and gas regulator levies will now fall under electricity and energy.
The Gas Act, 2001 (Act No. 48 of 2001) will allow Ramokgopa to preside over the lucrative development of the piped gas industry.
The controversial yet all-powerful National Energy Regulator of South Africa (Nersa), which was established in terms of the National Energy Regulator Act, 2004 (Act No. 40 of 2004), has also been “transferred” to Ramokgopa.
With Nersa regulating electricity, piped-gas, and petroleum pipelines among its core functions, Ramokgopa will have to relinquish the petroleum function to Mantashe.
Mantashe is empowered to oversee the regulation of petroleum pipelines in terms of the Petroleum Pipelines Act, 2003 (Act No. 60 of 2003) legislation that Ramaphosa “transferred” to Mantashe’s mineral and petroleum resources.
Technicality is ‘The Department of Mineral Resources and Energy [DMRE] will continue to exist until the legislation and relevant human and financial resources are transferred.”