Middle-income South Africans will pay significantly more for electricity this month as Eskom electricity tariffs increased by 15.63% on 1 April.
This comes after the power utility and the National Energy Regulator of South Africa (Nersa) reached an agreement on Eskom’s allowable revenue for the 2021/2022 financial year.
These price hikes are already filtering through to end-users in different municipalities, as seen with recent price adjustment notifications from areas like the City of Joburg.
FNB said that it expects these hikes to hit middle-income households particularly hard, and that families will have to review their already stretched budgets to keep the lights on.
The bank’s data shows that electricity spend is one of the largest spend categories for entry to middle-income customers, where the average electricity spend by a customer who holds its Entry Market bank account (Easy Account) increased by 9% (on average) between 2019 and 2020.
The average monthly electricity spend by a middle-market (Gold Account) customer increased by 15%, while a mass-affluent (Premier Account) customer spent 14% more on electricity over the same period.
It added that customers regularly turn to eBucks to supplement their electricity purchases, using roughly R4.5 million worth of eBucks for electricity purchases over the same period.
“The reality is that all customers will need to factor a 15% increase on what they have been spending on electricity on a monthly basis,” chief executive of the Middle Market segment at FNB, Rob Gwerengwe.
In the case of a household which spends roughly R500 per month on electricity, that household has to factor at least an additional R75 to what they have been paying.
“Unfortunately, this increase comes at a time when customers are heavily strained financially and these financially stressful times require every individual to scrutinise their budget a lot closer.”
New proposed tariffs for 2021/22
— Eskom Hld SOC Ltd (@Eskom_SA) April 7, 2021
Fuel price increases
Motorists will also need to contend with higher fuel prices in April, with the price of petrol now between R1 and 95 cents a litre more expensive.
The price of 95 (ULP and LRP) went up R1 on Wednesday (7 April), while the price of 93 (ULP and LRP) climbed 95 cents a litre. A litre of 95 ULP in Gauteng, now costs R17.32 a litre.
Meanwhile, diesel (0.05% Sulphur) increased by 65.20 cents a litre, while the price of diesel (0.005% Sulphur) went up by 63.20 cents a litre.
The price of illuminating paraffin (wholesale) went up by 34.80 cents. The price of illuminating paraffin (SMNRP) increased by 35 cents, while the Maximum Retail Price for LPGAS increased by 48 cents per kilogram.
In addition, the minister of finance, in his Budget Speech in February 2021, announced that the Fuel and Road Accident Fund (RAF) Levies on both petrol and diesel would increase by 16 cents a litre and 11 cents a litre respectively with effect from Wednesday, 7 April.
“With effect from 07 April 2021, the Fuel Levy in the price structure of petrol and diesel will therefore amount to 393 and 379 cents a litre respectively.
The Road Accident Fund Levy in the price structure of both petrol and diesel will amount to 207 cents a litre with effect from 07 April 2021,” said the department.