Burning billions in diesel saves lives and jobs, says Ramokgopa
South Africa’s government aims to end rolling blackouts by the time of next year’s elections, and in the interim, the state power utility needs to continue burning diesel to bolster output to save lives and jobs, according to the nation’s electricity minister.
Eskom has spent about R30 billion on diesel so far this year, but the cost to the economy would have been far higher had the country gone without the electricity it generated, Kgosientsho Ramokgopa told lawmakers in Cape Town on Wednesday.
Stage six load shedding, whereby 6,000 megawatts of capacity are removed from the grid, “can cost the country up to 1 billion rand a day,” the minister said.
“Stage-six load shedding for 2022 resulted in over 620,000 people losing jobs as a direct result”, and there are projections that those numbers could have exceeded 830,000, he added.
Steve Swart, a lawmaker for the opposition African Christian Democratic Party, urged Eskom to reapply for a diesel wholesale license after its initial submission was rejected by the Department of Mineral Resources and Energy.
The license would have “enabled Eskom to buy diesel at the basic fuel price instead of the wholesale price, and would have reduced the price from R23 per litre to around R16” while easing price constraints, Swart said.
The government is looking into the matter, according to Ramokgopa.
Eskom has been excluded from the National Treasury’s updated set of cost containment measures, Business Day reported citing a note published by the agency on Monday.
While the rules don’t apply to Eskom, as well as Transnet, they’ve been asked to apply the guidelines that include reduced spending on hiring, capital spending, travel and conferences. The norms are intended to help slash expenditure as the government grapples with an estimated revenue shortfall of more than R21 billion.
Earlier this year, the National Treasury partially exempted Eskom from disclosing irregular expenditure and material losses from criminal conduct in annual financial statements but subsequently u-turned on the strategy.
Finance Minister Enoch Godongwana is expected to announce more cost-containment measures in his medium-term budget on 1 November 2023.
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