Eskom Electricity Tariffs Expected to Hike, Says CEO Andre De Ruyter

• South African citizens should expect an increase in electricity tariffs, this is according to Eskom Ceo Andre de Ruyter
• De Ruyter says while the power utility was doing its best to bring down its debt, electricity still needed to increase to help Eskom's debt go down
• He also revealed that a number of municipalities owe Eskom approximately R39 billion which makes up 10% of its debt

CAPE TOWN - Eskom CEO Andre de Ruyter has warned South Africans an increase in electricity tariffs should be expected as the power utility battles to settle its high debt.

De Ruyter stated that while the state-owned entity says it is doing its best to cut down on costs internally to help save money, the country also needed to carry the brunt of Eskom's debt, according to EWN.

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"The bad news is that we will probably have to have a greater increase in electricity tariffs in order to make up for a series of adverse Nersa decisions," stated de Ruyter.

Some municipalities still owe Eskom millions

De Ruyter revealed that the money owed to Eskom by municipalities has increased and is now at an estimated R39 billion.

He added that municipalities' debt amounts to approximately 10% of Eskom's overall debt and those local governments needed to pay what is owed to the power utility.

Electricity becoming increasingly too expensive in South Africa

With the increasing tariffs, electricity in South Africa is fast becoming unaffordable for some South African households and there is no indication that tariffs will be decreased any time soon.

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We can expect loadshedding for the next 5 years, says expert

According to The Citizen, the Johannesburg Property Owners and Managers Association revealed that during the period of 2009-10 electricity tariffs increased by 224% while salaries of their tenants only increased by 91%.

Data from the BankservAfrica revealed that in the formal sector, electricity expenditures account for over 13% of the average take-home salary.

Data also showed that income is significantly lower in the informal sector, which makes electricity for affordability a greater issue, according to economist Mike Schussler.

Embattled Eskom reduces gross debt despite a loss of R18.9 billion

In other Eskom related news, Briefly News reported that embattled power utility Eskom recently stated that the Covid-19 pandemic has impacted the financial performance for March 2021 in a negative way. Sales were volumes down by 6.7%. It lessened the volumes' gross debt by R18.9 billion.

This was a 16.9% reduction and created a massive debt of R401.8 billion. The power utility's debt remained non-viable and attracted a nett finance that cost R31.5 billion. It turned the operating profit of R5.8 billion into an after-tax loss of R18.9 billion.

For the 2020/21 financial year, Eskom gained revenue of more than R204 billion. According to eNCA, Eskom disclosed its annual results on Tuesday, 31 August.

Source: Briefly News