Why Are Electricity Prices In South Africa Increasing?
Municipal electricity rates would increase by 7.47% on average starting July 1, 2022, according to Nersa. There won’t be any open forums to discuss the issue. Following Nersa’s approval of a 9.6% increase for Eskom customers, which became effective in April 2022, the proposal was made.According to Nersa, Eskom’s direct customers will see an increase in electricity prices of 15.06%, while municipalities will see a 17.80% increase. The price increases raise the nation’s average per-kWh electricity rate from just over R1.33 to roughly R1.46.
Reasons Behind Price Fluctuations
- Inadequate coal supply: The National Federation of Metalworkers of South Africa (Numsa) mentioned a shortage in the supply of coal in a media statement it issued on June 18 regarding its opposition to the increase in the price of electricity.
- Monopoly Status of Eskom: According to Dr. Tristan Taylor of Earthlife Africa Johannesburg (ELA JHB), electricity prices will remain high as long as Eskom maintains their monopoly. When the government has the resources, South Africans shouldn’t be forced to foot the bill for Eskom’s errors.
- The increased cost cannot be borne by the local government.
Ian Neilson, the executive deputy mayor of the City of Cape Town, asserted that by the time Nersa approved the increase, local government budgets would already have been put in place, making it impossible to pass the cost on to consumers.
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What Are The Ernergy Experts Saying?
South Africa’s National Energy Regulator holds a public hearing to discuss a proposed increase in electricity prices of 25.38 percent. On Tuesday and Wednesday, Representatives from business, civil society, and local government presented arguments for and against the increase.It was concluded that there is no “second round” for local governments to change tariffs once the budget and related revenue-raising measures have been approved.
What Are The Impacts On The Economy?
According to the union, Eskom’s 15% price increase for electricity would force people to seek out “alternatives,” some of which might be hazardous. Businesses would find it difficult to survive the increases as they already struggle with rising costs generally.
Every electricity price increase will hurt the small economy, cause businesses to fail, and result in layoffs of employees. People will turn to unhealthy resources like paraffin and wood, it warned. It’s a very sad story indeed, and we might see more fires in the squatter camps.
Municipal electricity rates would increase by 7.47% on average starting July 1, 2022. Eskom’s direct customers will see an increase in electricity prices of 15.06%, while municipalities will see a 17.80%. The price increases raise the nation’s average per-kWh electricity rate from just over R1.33 to roughly R1.46.
