Electricity Minister Kgosientsho Ramokgopa has warned that rising electricity prices could hurt South Africa more than load-shedding did.
He spoke at a media briefing on Friday about plans to end Eskom’s monopoly. He also said chairperson Mteto Nyati would serve another term.
“Its impact could be far more devastating than what load-shedding was, because the lights will remain on, but the cost of electricity can go up for as long as we don’t manage this effort,” he said.
Ramokgopa said the move to an open electricity market was entering its most difficult phase. He said prices could run out of control if the change is badly managed.
Ramokgopa said load-shedding had been a major drag on the economy. He said Eskom never doubted that it could end the power cuts.
The Department of Electricity and Energy presented its plan to end the monopoly in Parliament. It expects the first new electricity sellers to join Eskom by April 2027.
The plan aims to open the market to fair competition between Eskom and other providers. The department said this should lead to lower electricity prices.
Eskom’s prices have climbed far faster than inflation. Codera Analytics data shows Eskom’s standard tariffs rose by 14.5% a year since 2008.
Consumer price inflation averaged 5% a year over the same period. That adds up to a 973% rise in Eskom tariffs, against 241% for inflation.
Eskom’s average price was 24.7 c/kWh in 2008/09, Daily Investor reported. By March 2026, it had reached 241.64 c/kWh.
Eskom’s electricity sales fell by 22.5% in the year to 31 March 2026, MyBroadband reported. This happened while the utility had a power surplus of 2 to 3 GW.
To offset lower sales, Eskom raised direct tariffs by an average of 12.74% that year.
Eskom has blamed higher coal and diesel costs, municipal debt and electricity theft for past price rises. It has long argued that tariffs must move towards cost-reflectivity.
“Without a cost-reflective tariff path, we will remain reliant on government support, which implies that the taxpayer will have to foot the bill for the revenue shortfall,” Eskom said in 2020.
“If we don’t manage this exercise correctly, we’re going to erode the disposable income of households,” Ramokgopa said.
He said the government cannot grow the economy or reduce poverty while electricity costs stay inefficient. “We feel your pain, we hear your cries,” he said.
Source: this article is based on reporting by MyBroadband. Image: MyBroadband. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.