Hogan: Eskom hike better for SA

Cape Town - The Public Enterprises Minister Barbara Hogan has warned holding down electricity prices now will result in even higher prices in the near future.

Speaking at a media briefing in parliament on Tuesday, Hogan pointed out that should the 34% increase in power tariffs applied for by Eskom not be granted, a good deal of volatility will be injected into the tariff structure.

She drew attention to what happened in March, when the regulator cut the rates to be charged by Transnet for its petrol pipeline by 10.4%, saying that the costs of building a new pipeline cannot be in included in the tariff.

The new multi products pipeline will quadruple the pipeline assets and will eventually result in a spike of R12bn when the costs can be factored in.

However, Energy Minister Dipuo Peters said in parliament government will oppose a rapid rise in electricity tariffs.

"It is an important matter that needs to be put into proper perspective, particularly as it relates to the latent concerns about the impact on the indigent," she said.

"At the outset, I must state categorically that we do not agree that the tariffs must rise rapidly.

"It is our view that this will lead to unintended consequences, not least of which would be an adverse economic impact in the face of the recession we are currently experiencing," Peters said.

The national energy regulator is expected to announce his decision on the Eskom tariff later this week.

- I-Net Bridge & Sapa