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Eskom price hikes staggered?
16/04/2008 14:38 - (SA)
Evan Pickworth
Johannesburg - Chief economist of Econometrix, Dr Azar Jammine, said during an investor briefing on Wednesday that he has
discussed with government the prospect of only increasing electricity prices by 26% over the next three years as opposed to the far higher 60% being proposed now.
"I believe a 26% increase this year, next year and the year after is enough. It works out to a doubling over the three-year period and will bring in enough money; not enough for co-generation, but at least it would not have the distortive effects on the rest of the economy as some people are thinking about," he says.
Jammine indicated that the public enterprises department "seemed glad about it" when he raised it, as they indicated they were thinking about it and had encouraged ideas like this to be proposed ahead of the decision to be made on June 6.
Submissions around energy prices are being taken now.
He noted that it is felt by many economists that the department of minerals and energy is looking at it "too narrowly" and at the meeting economists tried to alert government to the broader picture "as 60% is just too disruptive for the economy".
- I-Net Bridge
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