40% electricity price increase warning in South Africa

According to a statement from the Democratic Alliance, South Africa’s parliament will debate a proposal from the nation’s state-owned energy utility that could see electricity tariffs rise as much as 40% next year.

National Assembly Speaker Thoko Didiza confirmed officials will discuss the legality of the energy regulator’s decision to allow Eskom to add an R8 billion “make-up tariff” next year.

The state-run company also plans to request that the National Energy Regulatory Authority approve a further 36% increase in electricity tariffs in 2025.

Electricity prices have roughly tripled in South Africa over the past 14 years, even as sustained power cuts in Africa’s most industrialised economy stagnated growth.

“The potential impact of a 40% electricity tariff increase is horrendous for South Africans already struggling under a cost of living crisis,” Kevin Mileham, a DA member of parliament, said in the statement.

“South Africans shouldn’t have to pay for Eskom’s inefficiency. We have taken this fight to Parliament to lower electricity tariffs before the 40% hike,” he said.

“No one should have to choose between putting food on the table or keeping the lights on.”

This debate comes as Electricity Minister Kgosientsho Ramokgopa is driving the implementation of a new “electricity pricing plan”.

This plan aims to provide a solution to energy poverty in South Africa, whereby people cannot afford electricity, and tackle the rising cost of power in the country.

Ramokgopa recently provided an update on implementing the country’s Energy Action Plan (EAP) and outlined the new focuses of his ministry.

“Our electricity pricing plan needs to kick in, and that is the primary preoccupation of the ministry now, working with Eskom’s Distribution division and municipalities,” Ramokgopa said.

More engagements will also be held with South Africa’s energy regulator, Nersa, regarding ways to limit the increasing cost of electricity and expand access to affordable energy.

He said that industry players, including Eskom and municipalities, are committed to finding a solution to the rising cost of electricity in South Africa.

South Africans will pay five times more for electricity in 2025 than in 2010, following the repeated implementation of the above-inflation increases in electricity tariffs.

Many of these increases have also come when Eskom’s performance has declined, resulting in prolonged periods of load-shedding. These price increases are largely due to the utility’s dire financial situation.