Ahmed Waja, 2016-03-01

Various Organisations, and businesses have expressed concerns about the latest electricity tariff increase saying some companies will have to start restructuring.

The National Energy Regulator of South Africa (NERSA) yesterday approved a 9.4% tariff hike, which comes into effect from April this year.

Eskom initially applied for a 16.6% tariff increase in November last year arguing that its current deficit, for which the additional tariff revenue was needed, arose from being forced to use expensive diesel for its gas turbines to keep the lights on.

Economist at Econometrix Dr. Azar Jammine says it could have been worse.

“I think that we can be very grateful that Nersa held back and that the tariff increase this year will be lower ironically than last year`s increase of 12.7 percent.”

Meanwhile the Congress of South African Trade Unions (COSATU) say they are utterly opposed to the increase and strongly feel that consumers are being forced to carry the burden of Eskom’s inefficiencies.

Spokesperson Sizwe Pamla says the increase will plunge even more people into poverty, and going forward these tariff increases will have dire consequences for the economy and job creation.

The Chamber of Mines says it noted the decision by Nersa, and added that any more electricity hikes will put struggling mining companies further into the red.

Eskom says Nersa`s decision to hike the electricity tariff by only 9.4 percent will have “operational consequences” on the power utility.

However Eskom says it will do its best to avoid the risk of load shedding.

(Edited by Faizel Patel)