Eskom Rates Will Go Up – By How Much?
The price you pay for electricity is about to shoot up. The question is now: by how much?
Putting Up Prices
We all know Eskom is in a world of pain. Over the many years of state capture the institution was looted thoroughly and money meant to improve things was sent right to the pockets of many greedy and corrupt people.
Trying to root out that corruption now is proving very hard for Eskom and they face constant battles against those within the organisation and those who provide services and products with sabotage the new order of the day.
Facing all of that along with crippling debt, Eskom have asked for one of the biggest increases to their rates ever, a proposed 32% price hike.
They Have To Ask NERSA
Eskom do not just get to set their own prices. They have to get official sign off from Nersa.
Nersa is the National Energy Regulator of South Africa.
In the past Nersa has tried to limit how much Eskom has pushed up prices. This has even led to court cases between Eskom and Nersa.
It is clear that Eskom is in a world of pain and needs lots of cash to try throw at the variety of problems. Even just the price of things like diesel and oil going up has a big impact on Eskom and those alone could require a minimum of a 7.8% increase just to cover those costs.
This means that it is very likely that we are finally in for a big price increase this time around.
How Bad Will It Be?
Experts are debating the topic but it is not unrealistic to think that at least a 25% increase is on the cards*.
Theoretically, it could even be the full 32% (but that is somewhat unlikely as there will likely be some attempt to make it look like government was trying to assist consumers by limiting the increase).
‘you need to adjust your household budget for electricity’
What this means is that you need to adjust your household budget for electricity and add another 25% (or more) to that.
Not only that of course, since all companies and businesses will have to look at what portion of their running costs are going to be affected and adjust their pricing.
So, prepare for a wave of price increases across the board for all sorts of things from groceries to professional services and think twice before you leave the light on when you leave the room.
*The formal announcement will be made by the end of 2022