Eskom says its decision to apply for a 20.5% tariff increase for the coming financial year still stands. This emerged during the National Energy Regulator’s final public hearings taking place in Johannesburg.
The power utility says the requested hikes are not meant to recover monies lost through corruption or load shedding.
The COVID-19 pandemic, rising inflation, record-high unemployment and slow economic growth are just some of the challenges affecting South African households daily.
With plans to stimulate economic recovery, can South Africans afford to pay higher electricity tariffs?
Eskom is seeking permission from the National Energy Regulator of South Africa (NERSA) to increase tariffs by 20.5%.
“Changes in OCGs have increased… The 20.5% remains,” says Eskom CFO Calib Cassim.
Eskom says the 20.5% tariff increase is necessary because it still needs to raise R6.5 billion for diesel to power the backup generators. But, the Minerals Council of South Africa says this increase will hamper the country’s economic recovery.
Henk Langenhoven says, “The reason why our economy is not growing is as a result of electricity constraints.”
Johannesburg mayor, Dr Mpho Phalatse says such a tariff hike would simply be unaffordable for residents and small business owners, which are already buckling under the pressure of dwindling incomes and the rising cost of living.
“The proposed tariff hike will be devasting,” Dr Phalatse argues.
Once the hearings are concluded, the regulator will make its determinations, which will be made known next month.
VIDEO: More calls for Nersa to reject Eskom’s new tariff proposal