‘A 50% to 60% Eskom increase will shock SA economy’

2011-08-26 11:23

Eskom’s “overcooked” tariff increases will negatively affect the future of the country’s economy, the Energy Intensive Users’ Group said, in light of an estimated 50% to 60% increase over three years.

“The next tariff increases will have adverse effects, and far reaching implications for all South Africans,” it said.

“These price increments add additional pressure to industrial customers to just maintain current production levels and further price increases will result in production halts and job losses.”

The group said primary energy costs had increased by 19.8% this year, which was a significant increase over last year’s 17%.

At the moment the average tariff was 50c per kilowatt-hour.

The group expected the tariff to settle around 75c to 80c/kWh by 2016. This meant that there would be another 50% to 60% increase over the next three years.

The group said it would be undertaking an industry wide impact assessment of the electricity price path.

“We have seen a number of refineries and smelters closing down and need to determine how poor the outlook is to ensure South Africa doesn’t shed critically needed jobs.”

Eskom was not immediately available for comment.

The group is a non-profit organisation that represents energy consumers across the country.

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