S. African business express concern over electricity tariff hike

JOHANNESBURG, March 8 (Xinhua) -- South African business and mining sector raised concern over the increase of electricity prices which they said would negatively affect various sectors.

National Energy Regulator of South Africa (NERSA) on Thursday announced electricity tariff increases of 9.41 percent in 2019/2020, 8.1 percent in 2021 and 5.22 percent in 2021/2022.

The Minerals Council of South Africa said the tariff increase will result in job cuts in the sector.

"We are disappointed to again see higher-than inflation increases. There is no doubt that these substantial tariff increases will have a major impact on the industry's cost structure, jeopardizing the viability of marginal and loss-making mines and, inevitably, accelerating job losses at energy intensive mines in particular," said the Chief Economist of Minerals Council Henk Langenhoven.

Business Unity South Africa (BUSA) also noted with concern that the above-inflation electricity tariff hikes against the backdrop of an economy that is under performing.

BUSA Vice President Martin Kingston stated that the tariff hikes could result in decline in power utility Eskom's customer base, as users seek more reliable and cost-effective alternatives, exacerbating the depth spiral.

"BUSA has consistently emphasized the need for any tariff adjustments to be considered on the basis of affordability, justifiability and prudence. It also needs to be assessed against any restructuring of Eskom to ensure a fit-for-purpose electricity supply industry," he said.