{"id":805407,"date":"2025-01-02T14:30:00","date_gmt":"2025-01-02T12:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=805407"},"modified":"2025-01-03T08:07:46","modified_gmt":"2025-01-03T06:07:46","slug":"social-unrest-warning-in-south-africa-over-electricity-price-hikes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/805407\/social-unrest-warning-in-south-africa-over-electricity-price-hikes\/","title":{"rendered":"Social unrest warning in South Africa over electricity price hikes"},"content":{"rendered":"\n
Minister of Energy and Electricity, Dr Kgosientsho Ramokgopa, has warned that municipal debt is an “existential problem” facing South Africa \u2013 and steep increases in the cost of electricity are a ticking time bomb that could trigger \u201cunrest\u201d and undermine the government.<\/p>\n\n\n\n
Speaking at the latest Energy Action Plan media briefing, Ramokgopa touched on wide-ranging issues including energy milestones such as the improved performance of Eskom’s power stations which has resulted in over 200 days of no load shedding, along with their plan to reach a 70% energy availability factor.<\/p>\n\n\n\n
However, he emphasised that a major inhibitor of the utility meeting its goals is a mounting municipal debt problem \u2013 and some of the plans to tackle it may not see its desired result.<\/p>\n\n\n\n
Eskom recently revealed that 75 municipalities owe it more than R92 billion in unpaid electricity bills \u2014 a staggering R19 billion increase since March 2024.<\/p>\n\n\n\n
Ramokgopa said that the debt problem is largely due (but not limited) to a large proportion of South Africans experiencing poverty and, therefore, being unable to afford the price of electricity.<\/p>\n\n\n\n
The minister explained that “the great majority” of South Africans “can’t pay” for the price of electricity, while pensioners specifically are hit the hardest.<\/p>\n\n\n\n
He explained that the average cost of electricity for low-income households is R1,200, while pensioners earn R2,190; so after paying for electricity, the pensioners lose half of their income. <\/p>\n\n\n\n
Ramokgopa discussed the problems associated with tariff increases.<\/p>\n\n\n\n
Eskom has applied for large price hikes through 2027, which will effectively see prices climb 66% over the period.<\/p>\n\n\n\n
This includes:<\/p>\n\n\n\n
\n
36.15% on April 1, 2025;<\/li>\n\n\n\n
11.91% on April 1, 2026;<\/li>\n\n\n\n
9.1% on April 1, 2027.<\/li>\n<\/ul>\n\n\n\n
The main drivers of Eskom\u2019s request for price increases were said to be the cost of primary energy, operating costs, the cost of independent power producers (IPPs), international purchases and depreciation.<\/p>\n\n\n\n
However, Ramokgopa warned about its implications as he believes that the proposed increases are “unsustainable” and if left unaddressed, will create a “perfect storm that can undermine a legitimate government<\/strong>,” ultimately becoming a “national security problem<\/strong>“.<\/p>\n\n\n
![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/04\/Ramokgopa.png\")
<\/a>