Eskom's latest hike will ‘wipe out’ R80 grant increase
Business / 4 April 2019, 10:55am / KAILENE PILLAY AND SE-ANNE RALL
DURBAN - The latest Eskom increase will wipe out the recently-announced R80 monthly old-age grant increase.
This is the view of civic organisation, Pietermaritzburg Economic Justice and Dignity.
Speaking to The Mercury yesterday, Mervyn Abrahams, of the organisation, said because local municipalities and metros added their own increases to the approved Eskom tariff hikes to account for higher annual costs of providing electricity, the actual electricity tariff increase in July was likely to be higher than 13.8%.
In Pietermaritzburg, the average electricity consumption for households living on low-incomes is 350 kilowatt-hour (kWh) per month.
Currently, 350kWh costs R529.34 per month on a prepaid electricity tariff system. A 13.8% hike in electricity tariffs will increase the monthly cost of 350kWh by R73.04, to R602.38.
Abrahams said the R80 increase on the pension would be entirely wiped out.
“Pensioners now must face 2019 with no buffer to protect their families against goods and service price increases.
“On pensions already set at poverty-level values, and because of the critical role pensions play in supporting families, this is an indictment on the state,” he said.
EThekwini Municipality spokesperson Msawakhe Mayisela said it was anticipated that the huge increase would impact on price elasticity that would see consumers looking at alternative energy suppliers. “We will accordingly experience, as per the last five years, a decrease in sales,” he said.
He added that the outstanding debt by eThekwini consumers did not impact on payment for bulk purchases to Eskom.
“We always pay Eskom by the due date. The collection rates for electricity is almost 99%,” he said.
The chief executive officer of Debt Rescue, Neil Roets, said the fact that electricity was increasing at almost three times the rate of inflation was something the government did not seem to consider.
“The price of Eskom electricity on top of the substantial fuel increase has hit consumers like a ton of bricks. Consumers are no longer able to fund the lavish lifestyles and corrupt practices of our government who have been unable to keep the lights on,” he said.
Efficient Group chief economist Dawie Roodt said the tariff increase was the first of many.
“Eskom is hopelessly bankrupt. It is massively overstaffed. The situation at Eskom is dire with debt exceeding R420billion, gross operational failures, general mismanagement and corruption is still very much the order of the day,” Roodt said.
Bluff Ratepayers’ Association chairperson Ivor Aylward said increases had affected a number of small businesses and restaurants.
“We are not getting any richer. When things get better and other costs are decreased, the cost of food still remains high. How are people meant to cope? We are just trying to keep our heads above the water,” he said.
The president of the Durban Chamber of Commerce and Industry NPC, Musa Makhunga, said it urged the business community to ensure there were contingency plans in place to maintain productivity levels especially for plants which run 24-hour production cycles and construction sites with high- powered equipment.