Eskom hike ‘a disaster’

‘Increase in electricity… will directly impact food purchased’

ESKOM’S application for a 25,3% tariff in¬crease is a tipping point in the ability of most South Africans to put food on the table.
The Pietermaritzburg Agency for Com-munity Social Action said in its monthly Price Barometer yesterday that the pro-posed increase will on average move monthly electricity expenditure for a fami-ly in Pietermaritzburg to R584.50 from R465,50, an increase of R119 per month.

This is assuming the household is on pre-paid and is using a low average of 350 kWh per month.

Eskom were originally limited to an eight percent tariff increase for 2014-2015 by the National Energy Regulator (Nersa).
Because of the need to recover revenue, Eskom invoked a claw-back clause and re¬quested an increase of 12,6% (14,25% to municipalities), which was awarded.
Eskom have now applied to reopen tariff negotiations again for 2015-16 and 2016-17, and have requested a 25,3% increase.

“For the majority of working class households in South Africa, food, electrici-ty and transport account for as much as 90% of a household’s monthly expendi-ture. All three costs for most households have long exceeded affordability thresh-olds,” Pacsa said.

“A 25,3% increase on electricity, in a context where low incomes remove the possibility of absorbing such increases and where most families have already reduced consumption to the most barren level, will mean the monies will have to be found ei¬ther by reducing food or transport,” Pacsa said.

“An increase in electricity… will directly impact on food purchased.”

Just more than 53% of South Africans live below R779 per month. Statistics SA data shows only 43% of the working age population are employed.

Pacsa predicted that the proposed in-crease may lead to “public revolt and pro-tests”.

In April 2015 the cost of Pacsa’s food basket — which it regularly monitors — wasRl 629,04 (41%less than the R2 767,36 required for a basket of food to meet a basic level of nutrition for a family of five).
Between January 2015 and April 2015, the cost of a 25 kg bag of maize meal, the staple food for the majority of South Afri-cans, increased by 11,04% to R164.16.

“Pacsa has warned since July 2014 that the excessive price hikes in electricity tariffs have long breached our ability to pay for it. We warned that electricity tariffs will erode any progressive gains in wages and destroy the capacity of social grants to de¬liver equity and reduce poverty,” the state¬ment said.

Nersa have requested public comment on the Eskom proposal — send your views to mypd3@nersa.org.za by the closing date on June 15, 2015.
Reserve Bank governor Lesetja Kganya- go warned at the last meeting of the Mone¬tary Policy Committee that Eskom’s pro¬posed increase in electricity tariff will pose significant upside risk to the inflation rate.

Debt Rescue CEO Neil Roets recently described Eskom’s proposal as a “catastro¬phe” for consumers that would put mil¬lions more of them into debt, following the likelihood of an increase in backruptcies of businesses and private individuals.

Need immediate financial help?

Thank you!

We look forward to the opportunity to get you debt-free!

Subscribe to Our Weekly Email