Year-on-Year: SA’s electricity price hikes are a relentless April Fool’s joke

ENERGY regulator Nersa has proposed another municipal electricity tariff increase of 7.47 percent as of July this year - and it’s no April Fool’s joke. | Karen Sandison

ENERGY regulator Nersa has proposed another municipal electricity tariff increase of 7.47 percent as of July this year - and it’s no April Fool’s joke. | Karen Sandison

Published Apr 27, 2022

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By Neil Roets

LOOKING back over a year of Eskom’s electricity price hikes may seem like a recurring bad dream, but the reality is that keeping the power on has become nothing short of a nightmare for the average South African.

Now, energy regulator Nersa has proposed another municipal electricity tariff increase of 7.47 percent as of July this year - and it’s no April Fool’s joke.

This figure constitutes a 3.49 percent increase for the 2022/23 year, and this is separate from the 9.6 percent annual increase for Eskom customers that kicked in on April 1. The price hikes will take the average electricity tariff in South Africa from just more than R1.33 per kWh to around R1.46.

Nersa’s chairperson, Nhlanhla Gumede, says Eskom’s latest increase was decided upon on the balance of interests of the economy, consumers, and the utility – eliciting anger from many quarters and prompting the question, “in whose favour does this balance sway?”

The reality is that consumers have been wrestling with constant electricity price increases over the past year – with no end in sight. On April 1, 2021, South Africans woke up to a 15.6 percent increase – one of the largest in the country’s history.

In real terms, this bought consumers 137. 74 units of electricity for R200. Fast forward to April 2022, and the same R200 will get you only 136. 98 units.

The fact is that South Africans from all walks of life are heavily impacted by each electricity price hike.

We all need power to keep our households and businesses running. We rely on electricity for everything we need to make life comfortable – and indeed possible - from running a hot bath to heating our food, not to mention the home entertainment that provides respite from the onslaught of spiralling living costs. There is no getting away from spending money to keep the lights on.

It's not as though South Africans haven’t raised their voices in protest with each devastating increase either - yet the utility, which poses one of the biggest threats to the country’s economic recovery, continues to charge more and more for its service – while happily announcing the next bout of load shedding.

Viewed in isolation, perhaps the burden of ever-increasing electricity prices might have been more easily absorbed had consumers not also had to contend with rising interest rates and sky-rocketing fuel prices.

Add to this the compounded effect on basic food prices, and there is no way to soften the blow.

Low- income households spend a far larger proportion of their income on food, transport costs and basic housing, so inevitably, they bear the brunt of this. There is no way to justify pushing people to the depths of despair.

It’s no surprise then that three has been a year-on-year increase in the number of South Africans seeking debt relief from Debt Rescue.

My advice to those who are in a debt trap is to seek help from a registered debt counsellor who can assist them to manage their financial predicament. This has been a very successful solution for thousands of consumers who are plagued by over-indebtedness.

Neil Roets is the CEO of Debt Rescue

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