Cape Town – Finance Minister Enoch Godongwana has reportedly thrown his weight behind the 18% electricity tariff hike taking effect from July.
In March, the National Energy Regulator of South Africa (NERSA) approved Eskom’s Retail Tariff and Structural Adjustment (ERTSA) application and an average tariff increase of 18.65% for the utility’s standard tariff customers and an increase of 18.49% for municipalities.
The increase for Eskom’s standard tariff customers took effect from 1 April 2023 and for municipalities, it is expected to start on 1 July 2023.
The power utility defended the price increase despite the ongoing power cuts, stating it would positively contribute from a financial and sustainability point of view.
The electricity tariff price increase received a lot of backlash, with President Cyril Ramaphosa saying he could not interfere with NERSA’s decision to hike electricity prices.
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Meanwhile, Godongwana on Wednesday said the National Treasury was in support of the 18% electricity tariff increase, reported IOL.
Responding during the question and answer session at the National Assembly, Godongwana said he supported the increase in the current economic environment precisely because he was dealing with Eskom debt, the report said.
“It is quite important that in doing so, Eskom moving forward becomes viable.
“I know it costs the economy but at the same time there is a need to balance the cost to the economy and the survival of the institution,” the report quoted Godongwana as saying.
He also confirmed that his department had engaged with NERSA prior to it approving the price increase, adding that there was going to be a challenge for the funding model for municipalities and the key question is whether municipalities should rely on electricity sales as a source of revenue.
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Compiled by Olwethu Mpeshe
