Eskom, South Africa’s state-owned power utility, has implemented its annual price increase, further burdening households already grappling with economic challenges.
Hike effective immediately
The timing of this hike, alongside the looming May 29 elections, underscores the complexities facing both citizens and politicians alike.
The hike, effective immediately for Eskom’s direct customers but deferred until July 1 for municipalities, follows a series of events involving regulatory approvals and legal challenges.
The National Energy Regulator of South Africa (Nersa) granted Eskom a substantial increase of 12.74%, coupled with a 25.64% affordability subsidy.
This decision, however, sparked backlash, with political parties such as the DA and the South African Local Government Association contesting the move in court.
Legal challenge dismissed
Despite their efforts, the legal challenge was dismissed, leaving the hike intact.
“On 10 October 2023, Eskom applied to the National Energy Regulator of South Africa (NERSA) for the approval of its Retail Tariff and Structural Adjustment Application (ERTSA) and the Schedule of Tariffs for the period from 01 April 2024 to 31 March 2025.
“On 14 December 2023, NERSA determined the tariff increase for 2024/25, applicable to Eskom’s direct customer tariffs from 01 April 2024, and to Eskom’s tariffs for local authorities (municipalities) from 01 July 2024,” Eskom said.
“The average increase applied to the key industrial and urban tariffs will be 13.29% due to the increase in the affordability subsidy charge. The affordability subsidy charge is raised as a subsidy to the Homelight 20A tariff and is determined by NERSA. This charge exists due to historically lower Homelight 20A tariff increases and is paid by the non-municipal large industrial and urban tariffs.
“There are no tariff structural changes for 2024/25, however, Eskom is considering a tariff restructuring submission to NERSA for implementation in 2025/26,” it said.
Economic strain
This increase comes amidst a backdrop of economic strain, with South Africa’s annual inflation rate reaching 5.6% in February 2024, surpassing market forecasts.
Rising inflation, particularly in sectors like transport and housing, exacerbates the financial burdens on households, making the tariff hike particularly unwelcome.
Furthermore, the decision to maintain the repo rate high by the Reserve Bank adds to the financial pressures faced by many South Africans.
As fuel prices are anticipated to rise further and the Reserve Bank maintains its stance on the repo rate, frustrations among South Africans continue to mount.
The absence of tangible measures raises questions about the government’s responsiveness to citizens’ needs, beyond tokenistic gestures such as rallies and free merchandise.
The confluence of economic challenges, tariff hikes, and electoral disillusionment paints a bleak picture of governance in South Africa.
As citizens grapple with financial hardships aggravated by policy decisions, the upcoming elections loom as a pivotal moment for the nation’s democratic course.
Yet, without substantive action addressing citizens’ concerns, the electorate’s frustration may well overshadow the democratic process itself.
