South Africa Faces Further Electricity Price Hikes as Eskom Proposes New Tariffs

Revised Pricing Policy Aims to Curb Excessive Hikes

South Africa has not reviewed its electricity pricing policy since 2008, despite massive structural shifts in the energy sector and changing consumer habits. Ramokgopa stated that household consumption patterns have evolved, pointing out that residents in informal settlements now routinely use refrigerators, mobile phones, laptops, and electric kettles, which drives up overall electricity demand. The newly proposed pricing framework seeks to transition tariffs toward cost-reflective pricing over a five-year window while establishing a long-term price path. Ramokgopa indicated that the administration eventually aims to provide a 10-year outlook to give businesses and energy industries greater certainty for capital investment and expansion plans. The minister asserted that the era of double-digit electricity tariff increases should be over.

Relief Measures and Subsidy Overhauls for Vulnerable Households

Under the revised framework, the government plans to increase free basic electricity allocations for qualifying households from the current 50kWh up to a range between 200kWh and 300kWh. Officials confirmed that this expansion will be funded within existing allocation without requiring additional money. To combat administrative leakage, the policy introduces digital platforms and tighter management of indigent registers to ensure support reaches intended recipients rather than getting redirected to cover municipal expenses. Ramokgopa emphasized that tariffs must no longer subsidize inefficiencies at Eskom or local municipalities, stating, A consumer can be burdened by bad decisions that are made, either at Eskom or at municipality.

Market Shifting Away From State Monopoly

The revised policy also mandates transparent billing structures by separating electricity supply costs into distinct components, including coal conversion, transmission, and administration. Furthermore, the framework allows rooftop solar owners to export excess power back into the grid in exchange for billing credits. Highlighting the changing landscape, Ramokgopa noted that regulatory reforms have enabled private producers and new generators to enter the market. Eskom is no more that monopoly that we have come to understand, Ramokgopa said during the Pretoria briefing. While the national energy regulator requires another 12 to 18 months to fully determine the formal price path, the policy intends to protect paying customers from carrying the financial burden of non-paying entities.