{"id":855731,"date":"2026-04-02T10:00:00","date_gmt":"2026-04-02T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=855731"},"modified":"2026-04-02T09:06:24","modified_gmt":"2026-04-02T07:06:24","slug":"households-in-south-africa-are-getting-hammered","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/855731\/households-in-south-africa-are-getting-hammered\/","title":{"rendered":"Households in South Africa are getting hammered"},"content":{"rendered":"\n

The latest Cost of Living report by the Competition Commission shows water and electricity costs are running away from headline inflation, with South African households bearing the pain.<\/p>\n\n\n\n

According to the group, electricity inflation in the country has surged by approximately 85% over a five-year period to January 2026.<\/p>\n\n\n\n

This is in contrast to the 30% general inflation over the same period.<\/p>\n\n\n\n

The 85% rise includes the July 2025 hike in municipal electricity tariffs. Before these adjustments, the cumulative price increase from 2020 to June 2025 was 68%, the commission said.<\/p>\n\n\n\n

However, the increase doesn’t include Eskom’s latest increases.<\/p>\n\n\n\n

The report was published on the same day that the national power utility hiked its tariffs for direct customers by 8.8%. Municipalities will see increases of around 9% in July.<\/p>\n\n\n\n

The Competition Commission added that water supply inflation followed a similar and notable acceleration.<\/p>\n\n\n\n

Following municipal tariff revisions in 2025, the price of water supply increased by 68% over the five-year period. <\/p>\n\n\n\n

Before the July 2025 adjustment, the cumulative price increase from 2020 to June 2025 was 50%, it said.<\/p>\n\n\n\n

According to the commission, these price pressures emanate from the government, with state-owned entities like Eskom and municipalities driving the higher costs.<\/p>\n\n\n\n

Water and electricity are regulated and administered price points in South Africa, but the commission said this does not mean they’re affordable.<\/p>\n\n\n\n

“Prices are primarily determined by providers\u2019 operating expenses and financial requirements, with each municipality generally setting its own tariff for end users,” the group said.<\/p>\n\n\n\n

Unfortunately for South African households, these expenses and financial requirements are severely tilted against them and affordable services.<\/p>\n\n\n\n

For Eskom, decades of mismanagement, corruption and neglect have left it with significant cost pressures, while also facing a mountain of debt owed to it by municipalities.<\/p>\n\n\n\n

The municipalities, meanwhile, have faced much of the same, with maintenance, infrastructure investment and network expansion falling by the wayside amid wider service delivery collapse.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The problem is not going away anytime soon<\/h2>\n\n\n\n

The Competition Commission said that a key concern is that the water and electricity price pressures are not expected to go away anytime soon.<\/p>\n\n\n\n

With the 8.8% Eskom tariff hike already effected for 2026, and the 9% municipal hikes still to come, South African households will continue to face financial pressure.<\/p>\n\n\n\n

The National Energy Regulator, Nersa, has also allowed Eskom to increase tariffs by another 8.8% in 2027, with tariff hikes in the utility’s next MYPD application also expected to come in higher than expected.<\/p>\n\n\n\n

This stems from a blunder by Nersa while processing the latest MYPD that resulted in an undercalculation of Eskom\u2019s costs by R54.7 billion.<\/p>\n\n\n\n

To correct for this error, Nersa allowed for the R54.7 billion to be paid by customers over time.<\/p>\n\n\n\n

The first tranche of R12 billion will be paid through higher tariffs in 2026, bringing the average increase to 8.8%, effective 1 April. This was previously a 5.4% hike.<\/p>\n\n\n\n

A further R23 billion will be paid in 2027, with price hikes jumping from the original 6.2% to 8.8%.<\/p>\n\n\n\n

The balance of R19.7 billion will be recovered through future price applications by Eskom in the next wave of hikes.<\/p>\n\n\n\n

“This means consumers are likely to continue facing significant price hikes for electricity over the next few years,” the commission said.<\/p>\n\n\n\n

This also means that electricity prices will continue to veer away from CPI, with the South African Reserve Bank targeting inflation at 3%.<\/p>\n\n\n\n

“This growing divergence underscores the extent to which administered prices for essential services…have outpaced general price pressures,” the commission said.<\/p>\n\n\n\n

This significantly intensifies the cost burden on South African households and “reinforces the central role of utilities in shaping the cost-of-living trajectory,” it said.<\/p>\n\n\n\n

“Recent policy developments further indicate that upward tariff pressures are unlikely to abate in the near term.”<\/p>\n","protected":false},"excerpt":{"rendered":"

The latest Cost of Living report by the Competition Commission shows water and electricity costs are running away from headline inflation, with South African households bearing the pain.<\/p>\n","protected":false},"author":10,"featured_media":855742,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[1516,1808,1164,2006],"class_list":["post-855731","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-competition-commission","tag-electricity","tag-eskom","tag-nersa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/855731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=855731"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/855731\/revisions"}],"predecessor-version":[{"id":855748,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/855731\/revisions\/855748"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/855742"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=855731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=855731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=855731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}