Eskom looking to increase tariffs by 80 percent to recoup finances

Eskom looking to increase tariffs by 80 percent to recoup finances

- Eskom is seeking to raise the cost of electricity by 80%

- This is aimed at recouping some of the major losses incurred by the SOE over the last financial year

- However, one energy expert says that such an increase will simply be unbearable for citizens

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Eskom is set to substantially increase electricity tariffs in order to make up for the R20.7 billion loss it recorded in the last financial year.

According to an energy expert, the power utility is looking to implement an 80% increase to the cost of electricity.

This comes after a 14% tariff increase was approved in April.

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These tariff increases are sure to place even more financial strain on taxpayers, who are already mostly cash-strapped (the majority of South Africans run out of money by the middle of the month).

Additionally, Finance Minister Tito Mboweni has said that taxpayers will also foot the bill for the R59 billion bailout allocated to Eskom, Briefly.co.za has gathered.

The increase in electricity costs will also affect business by forcing down profits. In some cases, these costs will passed along to the consumer in the force of increases to sales prices, but in others it will simply mean that foreign investment will pull out of the country. Already, R70 billion in foreign investment has left South Africa this year alone - with Eskom cited as one of the main reasons.

READ ALSO: Eskom dishing out huge salaries to execs despite R20 billion loss

Another likely result of such increases to electricity is an increase in illegal connections, says energy expert Ted Blom. According to The South African, many citizens will simply stop paying for electricity at all if it becomes too expensive.

No matter what Eskom decides to do, it seems the financial strain is here to stay - for citizens as well as the power utility.

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Source: Briefly.co.za

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