Eskom’s tariff increase a mixed bag for consumers

The National Energy Regulator of South Africa (Nersa) has approved Eskom’s tariff hike request, with increases of 12.7% for 2025/26, 5.36% for 2026/27, and 6.19% for 2027/28. While the hike is significantly lower than Eskom’s initial request of 36.15% for 2025/26, 11.81% for 2026/27, and 9.1% for 2027/28, it will still have a significant impact on consumers – middle-income households in particular.

Read more: Eskom wants an increase in electricity tariffs of up to 44% next year

Speaking at the announcement of the tariff increase, Nersa chair Thembani Bukula said public consultations on Eskom’s proposed tariff hike revealed widespread concern.

Bakula said the top worry was affordability, with domestic customers stressing that the proposed price increases would force them to “choose between buying food or electricity”.

Read more: Food or electricity — power tax forces a cruel choice on Joburg’s poorest people

This fear is not unfounded, as the approved tariff hike will still have a significant impact on consumers. According to Sanisha Packirisamy, economist at Momentum Investment, the approved increase is a “delicate balance” between ensuring Eskom’s financial sustainability and keeping electricity affordable for consumers. Packirisamy noted that the hike was lower than expected, along with decreasing inflation and a cut in interest rates this week – all of which were positive outcomes for consumers.

The central bank’s Monetary Policy Committee (MPC) cut the key repo rate by 25 basis points on Thursday, a move justified by subdued inflation and a third consecutive decrease in interest rates.

Read more: Cost of basic foodstuffs drops as inflation hits four-year low

However, the Eskom tariff hikes will still jolt consumers, particularly middle-income households. Packirisamy elaborated on the impact of the tariff hike on different income groups: “If you differentiate between low-income, low-middle income, middle income, middle-high and high, your low-income bands are typically a bit more sheltered from the electricity costs,” she said. For example, the City of Cape Town offers a “lifeline” electricity tariff, which is a special, highly subsidised tariff intended to provide relief to prepaid customers with limited means.

“So you would find that your middle-income consumer tends to be hit a bit more disproportionately … your middle and your middle-low income consumer probably the most stressed.”

Mitigation measures

 Positive outlook