The inevitable has finally happened! We had known for a while now that the price of electricity in South Africa was going to go up at some stage and today (Thursday) we have gotten confirmation that Eskom has been granted a 31.3% tariff increase by the National Energy Regulator of SA(Nersa). Eskom had wanted a 34% hike but they have to settle for the 31.3% hike. The increase comes into effect as early as next week (1 July).

The tariff increase will result in a rise in the average standard tariff from 25.24c per kilowatt-hour (kWh) to 33.14c. With this increase, Eskom will up their revenue as they have been seeking to generate more cash so they can upgrade their current infrastructure. This increase is going to be met with very mixed reactions. Increasing the price of electricity will mean that the consumers are going to spend more on their monthly expenses bill and inturn, producers could hike the prices of their goods and services as most things need electricity to be made. So in the long run we could see an increase in the price of everything.

But then again, Eskom needed this increase so they can have money to build new power stations so that we do not have a shortage of electricity in the country.