Eskom: SA neighbours pay less
2008-04-24 14:55
Special Report
Eskom is set to seek a 34% hike in electricity tariffs, back from the 88% rise it had been considering due to the global economic slowdown, a newspaper says.
Johannesburg - Average South African residential electricity tariffs are 274% higher than Eskom charges for power sold to the country's neighbours, it emerged on Thursday.
Addressing a debate hosted by trade union Solidarity, economist Mike Schussler said residential tariffs have also risen in excess of average inflation rates for the past 11 years.
Schussler said if Eskom has its way and electricity tariffs are
increased by 60%, the power utility's residential customers would pay even more.
Making reference to data carried in Eskom's 2007 Annual Report, Schussler pointed out that SA residential customers paid more than 40c per kWh last year while the 10 countries to which Eskom sells power paid only just over 10 cents per kWh.
A price increase of 60% would mean South Africans would still be paying about 6% less for their power than the international average, but the new tariff would be 14.8% higher than the emerging market average.
If Eskom gets the go-ahead to charge 100% extra, its tariffs will be 9.5% higher than the international average. However, this applies to those who purchase power directly from Eskom.
For those whose electricity is distributed through municipalities, the tariff hike would translate into a figure that is 16.8% higher than the international average.
SA power not cheapest
"If these rates are on top of the 14.2% already granted - then SA municipality rates will be in the ten most expensive rates in the world today," said Schussler, dispelling the myth that SA's electricity is among the cheapest in the world today.
"SA does not have the cheapest electricity in the world," he said, explaining that the study often quoted by the utility was in fact commissioned by the utility and used only "a carefully selected group of industrial countries" rather than making comparisons against other developing countries.
"Household rates are in the bottom third of international rates, but if electricity tariffs are implemented we may end up having some of the most expensive electricity in the world - even more expensive than France," said Schussler.
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