Minister of Electricity and Energy Kgosientsho Ramokgopa has acknowledged the sharp increase in electricity prices in South Africa, which have risen by almost 1,000% between 2007 and 2023, far outpacing inflation. This has put a heavy strain on families and businesses, with household consumption constituting over 60% of the country’s GDP.
According to Ramokgopa, the government is finalising a new electricity pricing policy, which is expected to be made public before the end of May. The policy aims to address the rising costs and provide relief to struggling households. As the South African government works to revitalise the economy, this move is seen as a crucial step in stimulating growth.
Impact on Low-Income Households
The current free basic electricity allocation for indigent households will also be reviewed, with the minister stating that the 50 kilowatt per hour per household allocation is no longer relevant due to changes in consumption profiles. The review will form part of the electricity pricing policy, which will soon be released for public comment.
Some of the key factors that will be considered in the review include the increased use of appliances such as televisions, electric kettles, and refrigerators in low-income households. The government aims to ensure that the free basic electricity allocation is fair and effective in supporting these households.
What Does This Mean for South Africans?
The new electricity pricing policy is expected to have a significant impact on South African households, particularly those that are struggling to make ends meet. With the South African economy still recovering from the effects of the pandemic, this move is seen as a welcome relief. The policy is expected to help stimulate economic growth and reduce the burden on households.
Here are some of the potential benefits of the new policy:
- Reduced electricity costs for low-income households
- Increased access to electricity for all South Africans
- Stimulated economic growth through reduced energy costs
- Improved competitiveness for South African businesses
