“Nersa should have listened to the people’s plight and done a 5% blanket increase per financial year, which would have made it much easier for citizens.”
WHILE ratepayer associations and business chambers have welcomed the “lower” Eskom tariff increase of 12.7%, they have cautioned it would greatly impact citizens, who are already struggling to bear the daily cost of living.
Last Thursday, the National Energy Regulator of South Africa (Nersa) approved the increase in electricity tariffs for the 2025/2026 financial year. The increase is expected to come into effect on April 1.
Thembani Bukula, the chairperson of Nersa, said that for the 2025/26 financial year, the energy regulator had approved revenues of R384 610 million, which translated to a tariff increase of 12.7%.
In addition, he said for the 2026/27 and 2027/28 financial years, the energy regulator approved tariff increases of 5.36% and 6.19%, respectively.
Bukula said the decision was “not taken lightly”.
“The energy regulator recognises the challenges consumers face and the importance of ensuring that electricity remains affordable, while securing Eskom’s financial sustainability.
“Our challenge has been and remains to regulate the energy industry in a manner that balances the interests of energy producers on the one hand and those of consumers on the other. This is never an easy task, for inevitably, it is influenced by the greater economic environment, both locally and internationally, and as directed by the policy environment of the government,” he said.
Bukula added that the energy regulator appreciated the active participation and valuable contributions from all stakeholders during the decision-making process.
“Your inputs have been instrumental in shaping our decision, and we look forward to continuing our engagements as we work towards a sustainable energy future for South Africa.”
Reaction:
Meanwhile, last year, the POST had reported that according to a leaked document showing Eskom’s tariff increase application to NERSA for the next three financial years, the power utility had sought an additional 36.15% tariff increase in 2025.
Ish Prahladh, president of the eThekwini Ratepayers and Residents Association (Erra), said while Nersa had approved a much lower increase, ratepayers and residents were still going to be greatly affected.
“Our billing system and economy are in shambles. Unemployment is high. Nersa should have listened to the people’s plight and done a 5% blanket increase per financial year, which would have made it much easier for citizens. Furthermore, Eskom needs to look at their backyard and reduce costs to avoid such exorbitant increases.”
Anthony Waldhausen, the Chief Executive Officer of the Msunduzi Association of Residents Ratepayers and Civics (MARRC), said they opposed the increases.
“We question why we have to fund the corruption and poor management at Eskom. Each year we experience these tariff increases but we do not see any improvements at Eskom. We need the national minister to crack the whip with defaulting municipalities to pay their ballooning debt to Eskom. In this way, if Eskom has the funds owing to them, they would not need to increase tariffs, which impact negatively,” he said.
Waldhausen said the tariff increase would impact residents negatively as household goods and food would increase substantially.
“Residents are in dire financial constraints at the moment and are unable to survive on what income that they have.”
Mala Avathar, chairperson of the KwaDukuza Civic Association, said the increase was ”nothing short of a further burden” to ratepayers and residents.
“With continuous black-outs, break in-supply and poor service; how does Nersa justify the increase? Many households are grappling with the high expense of maintaining a family. Expenses escalate on a daily basis. It is also no secret that the majority of consumers of electricity are illegally connected to the power supply. How is this mitigated by utilities supplying electricity?
“Sadly this is a political chess game that common householders are becoming victims of. However it is time for civic organisations to unite under an apolitical banner and engage these roguish tactics employed as redistribution to the many that don't pay,” she said.
Melanie Veness, the Chief Executive Officer of the Pietermaritzburg and Midlands Chamber of Business, said: “We are pleased that the energy regulator took into consideration several of the factors that we raised on behalf of businesses at the public meeting and adjusted anticipated costs and revenue accordingly.
“However, while a downward adjustment to 12.74% is a relief when one compares it to the application amount of 36.15%, the question is whether we should be relieved, considering that inflation is currently at 3% and electricity prices have escalated by 1041% over the last 10 years.”
Veness said electricity was a significant cost to many businesses.
“It is unrealistic to expect businesses to employ when they keep having to absorb increases that are four times inflation, especially in an environment that is unconducive to trade in, because of constant infrastructure failure.
“Furthermore, continuous escalations of this magnitude erode competitiveness and squeeze margins to such an extent that investment is negatively impacted,” she said.
Palesa Phili, the Chief Executive Officer of the Durban Chamber of Commerce and Industry, said: “We acknowledge that this is far lower than the initial proposal of 36.15%. However, it is still substantially ahead of inflation, recorded at 3% in December. Furthermore, with the petrol price due to increase this week, it is evident that consumers and businesses will come under pressure if these costs are not contained.”
Phili said tariff increases significantly affected businesses, particularly when electricity was driving production.
“High electricity costs make businesses less competitive, especially in a global economy. It reduces the country’s competitiveness in terms of exports and makes it less attractive as an investment destination. Furthermore, excessive tariff hikes have the potential to exacerbate the socio-economic decline in our country. We need to collectively work together to reverse this decline.
“While we acknowledge that there is a methodology used to determine tariff hikes, hikes need to be justified against the current state of service delivery. In the case of eThekwini Municipality, the stable supply of electricity is not guaranteed despite businesses paying for essential services. We need economic reforms that will make South Africa an attractive investment destination,” she said.
Solly Suleman, the President of the Minara Chamber of Commerce, said the tariff increase was viewed with concern, as it would significantly raise operational costs for businesses, especially energy-intensive sectors.
“This will increase costs for business owners, potentially leading to higher prices for consumers, reduced profit margins, and, in some cases, jeopardise business viability. Energy costs are a major expense for many sectors, and the increase could lead to more financial strain.
“Prior to implementation, a thorough impact assessment on businesses should have been conducted, including support mechanisms for Small and Medium Enterprises (SMEs), phased tariff increases, and measures to improve Eskom’s efficiency to avoid passing excessive costs onto businesses,” he said.
Related Topics: