Electricity Prices in South Africa Will Increase by Nearly 13%

Published: Feb 5, 2025 17:30
【Electricity Prices in South Africa to Increase by Nearly 13%】According to South African media reports, the Energy Regulator Committee of the National Energy Regulator of South Africa (Nersa) has approved Eskom's application for a 12.74% increase in electricity prices. The committee also approved Eskom's electricity price increases of 5.36% and 6.19% for the 2026/27 and 2027/28 fiscal years, respectively. This decision is lower than the 11.8% and 9.1% increases proposed by Eskom in its sixth Multi-Year Price Determination (MYPD6) application. The electricity prices for direct customers will take effect on April 1, 2025, while municipal electricity prices will take effect on July 1, 2025...

According to South African media reports, the Energy Regulator Committee of the National Energy Regulator of South Africa (Nersa) has approved Eskom's application for a 12.74% electricity price increase. The committee also approved Eskom's electricity price hikes of 5.36% and 6.19% for the 2026/27 and 2027/28 fiscal years, respectively. This decision is lower than the 11.8% and 9.1% increases requested by Eskom in its sixth Multi-Year Price Determination (MYPD6) application. The electricity prices for direct customers will take effect on April 1, 2025, while municipal electricity prices will take effect on July 1, 2025.

The electricity price increase for the 2025/26 fiscal year is significantly lower than Eskom's requested 36.15% but still higher than the inflation-linked increases proposed by many stakeholders during public hearings in November and December. The consumer inflation rate in December was 3%, while the average annual inflation rate was 4.4%, lower than the 6% average in 2023. Additionally, Nersa faced certain political pressure to control electricity price increases, as South Africa's Minister of Electricity and Energy, Kgosientsho Ramokgopa, previously stated that Eskom's proposed 36.15% increase was unaffordable and unsustainable.

Minister Ramokgopa welcomed the decision in a statement while acknowledging that it would place pressure on Eskom. He stated that the government remains committed to working with Eskom to drive greater efficiency improvements. However, Ramokgopa noted that the approved electricity price adjustments took into account the need to alleviate inflationary pressure on communities and businesses. The South African government will introduce additional measures to support impoverished consumers and small businesses, though no specific details were provided.

Nersa Board Chairperson Thembani Bukula described the complexity of the decision-making process as a "delicate balancing act" that considered the needs of all stakeholders. He stated that Nersa must ensure Eskom's sustainability in both the short and long term while ensuring that the electricity services provided by Eskom are reasonably priced. "This is by no means an easy task. Inevitably, it is influenced not only by our methodologies and rules but also by the broader domestic and international economic environment. We remain guided and constrained by national policies and legislation."

In 2024, Eskom applied to Nersa for a 36% increase for the 2025/26 fiscal year, an 11.81% increase for the 2026/27 fiscal year, and a 9.1% increase for the 2027/28 fiscal year. This proposal sparked strong protests from the public and businesses, with many arguing that the increases were unaffordable.

Bukula emphasized that the regulator took extensive measures to ensure that public participation and stakeholder opinions were considered. The regulator held stakeholder meetings and public hearings and accepted written submissions. Household users stressed that if these prices were approved, they would have to choose between buying food and purchasing electricity. On the other hand, businesses made it clear that if these increases were approved, many of them would be forced to shut down.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
[SMM Hot-Rolled Coil Daily Transaction] Spot Transactions Edge Up
4 hours ago
[SMM Hot-Rolled Coil Daily Transaction] Spot Transactions Edge Up
Read More
[SMM Hot-Rolled Coil Daily Transaction] Spot Transactions Edge Up
[SMM Hot-Rolled Coil Daily Transaction] Spot Transactions Edge Up
[SMM Hot-Rolled Coil Daily Transaction] On August 5, the combined daily trading volume of hot-rolled coil from sample enterprises in SMM’s four cities (Shanghai, Lecong, Tianjin, Ningbo) stood at 11,210 mt, up 990 mt day-on-day (+10.0%), down 13.97% YoY (solar calendar) and down 2.86% YoY (lunar calendar).
4 hours ago
MMi Daily Iron Ore Report (August 5)
5 hours ago
MMi Daily Iron Ore Report (August 5)
Read More
MMi Daily Iron Ore Report (August 5)
MMi Daily Iron Ore Report (August 5)
Today, the DCE iron ore futures trended higher today. DCE’s most-traded I2609 contract closed at 706 yuan/mt, up 0.93% from the previous trading session. Spot prices at Qingdao Port rose 3–8 yuan/mt from the prior trading day. Traders quoted actively, while steel mills purchased as needed, leaving overall spot trading moderate.
5 hours ago
[Thai Nguyen promotes domestic steel use, 14 investors sign agreements for 168,000 mt]
5 hours ago
[Thai Nguyen promotes domestic steel use, 14 investors sign agreements for 168,000 mt]
Read More
[Thai Nguyen promotes domestic steel use, 14 investors sign agreements for 168,000 mt]
[Thai Nguyen promotes domestic steel use, 14 investors sign agreements for 168,000 mt]
Thai Nguyen authorities have called on businesses and investors to prioritize domestically produced steel when products meet requirements on quality, delivery time and cost. On July 31, Thai Nguyen Iron and Steel Joint Stock Company signed cooperation agreements with 14 businesses and investors, covering an expected 168,000 mt of steel consumption for projects and construction works in the province. The company committed to competitive pricing, flexible cooperation and enhanced technical and after-sales support. The move is expected to expand market demand for domestic steel, strengthen links between steelmakers and construction companies, and support production growth and the local economy.
5 hours ago