While Eskom is applying for yet another tariff increase and celebrating a profit of billions of rands, citizens are buying less electricity as they grapple with rising living costs and years of sharp increases in electricity tariffs.

In reaction to Eskom’s application for an average tariff increase of approximately 8.8% for 2027-’28, AfriForum will oppose this application and submit formal comments to the National Energy Regulator of South Africa (Nersa).

According to the organisation, the power utility will, within the span of a few days, celebrate a R30.35 billion profit, acknowledge billions of rands in recurring diesel payments, disclose extraordinary executive remuneration and apply for this tariff increase.

“Consumers are buying less electricity but paying more for it,” AfriForum said in a statement this week. “Electricity sales fell by 6.2%, yet its revenue increased because of ridiculously high tariffs. Now Eskom wants to raise tariffs above inflation – again. In a market that is flooded with electricity, consumers are now requested to pay more. General market rules would suggest that the prices would go down,” said Morné Mostert, AfriForum’s Manager for Local Government Affairs, commenting that Eskom’s logic does not add up.

According to AfriForum, this is not a sustainable solution, but rather a vicious cycle. Higher tariffs push households and businesses towards alternatives, which reduces Eskom’s sales even further and creates yet another excuse for more increases.

Recent tariff increases

For the 2026-’27 financial year, Eskom’s average electricity tariff increased by 8.76% on 1 April for direct customers and by 9.01% on 1 July for municipal bulk purchases. The redetermination is consistent with the statutory tariff principles, which require tariffs that enable an efficient licensee to recover the full cost of licensed activities, including a reasonable return, as stated by Nersa.

“It is indefensible for Eskom to plead poverty when applying for tariff increases and then boast about a multibillion-rand profit whilst paying executives millions of rands in incentives and extraordinary benefits. Consumers are expected to tighten their belts every year, but Eskom apparently applies a different standard to itself,” says Mostert.

Legal framework and requirements

AfriForum emphasises that Eskom is not automatically entitled to recover every expense it incurs from electricity consumers. The Electricity Regulation Act 4 of 2006 together with its amendments requires tariffs to enable an efficient licensee to recover the costs of its licensed activities.

The Electricity Pricing Policy further requires electricity prices to be based on an efficient and prudent utility, to reflect least-cost options and to exclude inefficiencies.

Consumers should therefore only be expected to pay costs that are necessary, reasonable, efficient and prudently incurred. Excessive or inadequately justified remuneration, irregular expenditure and payments arising from failures to comply with procurement or contractual requirements should not be passed on through electricity tariffs.

“It is irrational that Eskom remains hundreds of billions of rands in debt whilst still paying substantial performance incentives. A utility in such a precarious financial position has no business rewarding its executives whilst demanding that struggling consumers pay even more,” Mostert adds.

Formal opposition and scrutiny

AfriForum will scrutinise Eskom’s application and submit formal comments to Nersa.

“We hope that this time the regulator will consider not only Eskom’s prosperity, but also whether ordinary consumers can actually afford what Eskom is demanding.

“Consumers cannot be expected to finance Eskom’s profit party. If Eskom is selling less electricity, making billions in profit and improving its financial position, then continually increasing tariffs cannot be the answer,” concludes Mostert.

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