Fin24

Manufacturers to appeal tariff hikes

2011-09-28 07:00

Johannesburg - Manufacturers will appeal to the National Energy Regulator of SA (Nersa) for relief on its planned electricity tariff hikes, according to a newspaper report on Wednesday.

The manufacturers said the increases would force many companies out of business, the Business Day reported.

Price cuts were needed for distressed industries as well as reductions in the proposed 25% electricity price hikes pencilled in for the next couple of years, chairperson of industry group the Manufacturing Circle Steward Jennings told the daily newspaper on Tuesday.

Electricity prices for manufacturing had climbed 140% in the past four years, making it one of the main drivers of rising costs for industry, Jennings said.

"We have to attack these militant price increases... we can't afford another two years of 25% increases. We will fall out (of business), we are already falling out," he said.

Jennings said Manufacturing Circle would submit a white paper on its appeal for reductions on the tariff to Nersa before the end of the year.

The industry group represents 56 large companies including SABMiller [JSE:SAB], ArcelorMittal [JSE:ACL], Pretoria Portland Cement [JSE:PPC], Hulamin [JSE:HLM], Mondi [JSE:MND] and Allied Electronics Corporation [JSE:ATN].

Manufacturing accounts for 15.6% of the economy's overall output.

 

Comments
  • Sentor - 2011-09-28 07:40

    Johannesburg has been particularly badly hit. At a recent Nersa hearing Scaw metals produced figures and graphs which showed that City Power charges 117% more for electricity than those supplied directly by Eskom. CP have put huge mark-up on the bulk supply they buy from Eskom, enough to put business and industry out of business. Certainly making them uncompetitive. This issue needs to be investigated by competent journalists, it is the cost of incompetence and corruption.

  • Ockert - 2011-09-28 07:56

    Manufacturers just pass the increases on to the consumer so why are they complaining, the consumer is hard hit at home and at the shops but the ANC and their Eskom buddies just keep thinking there is a never ending stream of money in the consumer pockets, the end of the ride is very, very near and the gravy train is steaming to the end of the road.

      Werner - 2011-09-28 12:28

      Consumers can't afford the product so they don't buy. So - no sale by retailers and no restocking from manufacturers. As production starts dropping you get the add-on problem where you lose the whole 'economy of scale' advantage. The problem is not that the money is needed, it's that the increases are too sudden to try and correct for planning deficiencies.

  • Maestro - 2011-09-28 07:58

    What about us the poor consumer!!!!!!!!!!!!

  • Gore - 2011-09-28 08:17

    Where were they when this structure was approved and agreed to be phased in over a number of years. If business can not pay for their power, who will pay on their behalf - ordinary consumers: toughen up.

  • Peter - 2011-09-28 08:41

    Shame. How about poor little private individual me??? Government does not give a damn about me. The only way to succeed in this will be to change the government.

  • grant_grant - 2011-09-28 11:24

    if we can stop giving free and cheap to electricity and fuel to our neighboring countries, we should have more than enough to go around for a little longer? Why cant we just build another nuclear station?

  • zackie - 2011-09-28 12:29

    eskom with anc support is killing the golden goose

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