The Role of Smart Infrastructure on Petroleum and Piped Gas Regulation Strategy Development in South Africa

This paper presents a discussion on the role played by smart infrastructure in facilitating petroleum and piped-gas regulation strategy development. The current regulatory framework for these two industries is relatively in its infancy with key challenges noted on the methodologies used to set or approve tariffs and to approve maximum prices. Numerous applications of smart infrastructure and smart technologies are discussed to show how such will aid improved tariff decisions by energy regulator regarding transportation of petroleum products via pipelines as well as loading and storage tariff regimes. A discussion is also presented on how smart software systems may be adopted in future to evaluate the economic impact of tariff decisions that have been made by the energy regulator in the past. Smart technologies have also been regarded as crucial in gas pricing strategy development and how such systems may be utilised by the energy regulator in pricing methodologies of natural gas in future. The need for smart technology through econometric software in benchmarking research in piped-gas regulation is indicated and discussed. The drive to refine regulatory practices in the petroleum and piped-gas industries may not yield the most desirable outcomes if not backed by smart systems and smart infrastructure. Hence, this paper contributes to such a discourse, discussing areas that can be improved significantly through the adoption of smart infrastructure to foster regulatory regimes for the petroleum and piped-gas industries that are more investor friendly without prejudicing interests of end-users.