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“Overcooked” Eskom prices will hurt

Published Aug 26, 2011


Eskom's “overcooked” tariff increases will negatively impact the future of the country's economy, the Energy Intensive Users' Group (EIUG) said on Friday.

“The next tariff increases will have adverse effects, and far reaching implications for all South Africans,” it said in a statement.

“These price increments add additional pressure to industrial customers to just maintain current production levels and further price increases will result in production halts and job losses.”

EIUG said primary energy costs had increased by 19.8 percent this year, which was a significant increase over last year's 17 percent.

At the moment the average tariff was 50c per kilowatt-hour.

The EIUG expects the tariff to settle around 75c to 80c/kWh by 2016. This means that there would be another 50 to 60 percent increase over the next three years.

The EIUG said it would be undertaking an industry wide impact assessment of the electricity price path.

“We have seen a number of refineries and smelters closing down and need to determine how poor the outlook is to ensure South Africa doesn't shed critically needed jobs.”

Eskom was not immediately available for comment.

The EIUG is a non-profit organisation that represents energy consumers across the country. - Sapa

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