SOUTH AFRICA - WILL ESKOM'S NEW POWER PRICE HIKE ADD MORE DEBT TO YOUR HOUSEHOLD?

Middle- to low-income households, already struggling to make ends meet each month, will be pushed deeper into debt by the latest electricity hike.

That is according to Mervyn Abrahams, of the Pietermaritzburg Agency for Community Social Action (Pacsa), who said he expected more households to have their power cut or forced off the grid.

“This cycle has to stop and Eskom needs to find a different business model that would allow them to generate sufficient electricity at affordable prices for households and business, without pushing hundreds of thousands of households deeper into debt, poverty and darkness,” he said.

Abrahams said the hike, approved by energy regulator Nersa this week, was once again in excess of the consumer inflation rate of 6.2 percent..

Meanwhile, social grants had increased by only 6.3 percent; child support grants by 6.1 percent; and it was unlikely general wage increases would go beyond consumer inflation levels, he said.

“This electricity increase is unaffordable and households do not have the means to pay.

“This increase has been seen in the context of already severe financial strain on households and households having to take on debt to procure essential needs,” Abrahams said.

Barometer

The Pacsa Food Price Barometer shows that prices for a basket of food bought by working class households had increased by 14 percent over the past four months.

According to Pacsa’s research, any increase in electricity would reverberate throughout the economy.

“Households will not be able to absorb this increase by cutting back on their electricity consumption because they are already using the barest minimum of electricity.

“We anticipate that households will be forced to source dangerous forms of energy such as paraffin and candles, with negative consequences for health, education and well-being,” he said.

VIA - iol.co.za