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Kgosientsho Ramokgopa defends spending R30 billion to burn diesel at Eskom

Minister of Electricity Kgosientsho Ramokgopa said the money spent on diesel was justifiable. Picture: GCIS

Minister of Electricity Kgosientsho Ramokgopa said the money spent on diesel was justifiable. Picture: GCIS

Published Sep 20, 2023


Minister of Electricity Kgosientsho Ramokgopa has defended the use of R30 billion to burn diesel to stave off higher stages of load shedding.

Ramokgopa said government was correct to give Eskom R30bn to buy diesel during the current financial year because they were protecting an already ailing economy.

He said thousands of people lost their jobs last year because of load shedding and if higher stages were implemented more people would be out of work.

Ramokgopa, who was part of the Ministers in the Economics cluster answering questions in Parliament on Wednesday, said last year alone, more than 620,000 people lost their jobs.

He said Stage 6 load shedding was costing the country R1 billion a day, and that was unsustainable.

The government had to find ways to deal with this crisis.

Spending R30bn a year to burn was justifiable.

"Just to make the point that R30bn directed at burning diesel, you are quite correct that is an inexplicable amount of money to be used on diesel. But that number must be understood relative to the risks associated with not burning diesel. What do we know about not burning diesel? We know that Stage 6 load shedding can cost the country R1bn a day. Stage 6 for 2022 resulted in over 620,000 people losing jobs as a direct result of load shedding. The projections are that those numbers could go upwards of 800,000.

"We know that farmers are finding it difficult to produce at a competitive level. The productivity is undermined. They were sharing with me that 24% of their production relies on quality and reliable energy supply," said Ramokgopa.

He said load shedding has inflationary pressures, and ordinary people are struggling to survive.

This was posing a threat to food security.

He said there was food on the shelves, but people could not afford it.

"When you compute R30bn, you ask the question, can I burn R30bn to save R365bn per annum to the South African economy, undermine the further contraction of the South African economy, save jobs, and save lives? If you were to do that modelling, the answer is simple. For now, we need to make that investment," said Ramokgopa.

He added that they also need to improve the performance of power stations.