Search:  
Gauteng Business News
5779
VIEWS

Send  Share  RSS  Twitter  07 Dec 2009

ENERGY: Eskom's Revised Hikes Will Still Hurt

 





Recent Gauteng Business News

Even though Eskom has lowered its tariff proposal from 45% a year for the next three years to 35% per year for the same period, consumers will still be under severe pressure. Duggan Matthews, an investment professional at Marriott Asset Management examines the likely consequences.

According to Eskom, the typical suburban household is currently paying R990 per month for electricity. If we look at a suburban resident, with a take-home income of R20,000 per month, he is currently spending 5% of his disposable income on electricity.

A 35% annual price hike for each of the next three years, would see those average payments for electricity rising to R2436/month in the suburbs. If we assume that the resident in this example receives annual increases of 6% per annum over the next three years (using the upper band of our inflation targets), this person would earn R23,800/month by the 2012/2013 year. By then, the proportion of his income being spent on electricity would rise to 10.2%. This implies an effective doubling of electricity costs in real terms and has serious implications for consumers.

Average future monthly charges

2009/2010

2010/2011

2011/2012

2012/2013

Typical suburban household

R 990.00

R 1,336.50

R 1,804.28

R 2,435.77

% spent on electricity of a R20,000 p.m. net salary

2009/2010

2010/2011

2011/2012

2012/2013

6% inflationary increase

5.0%

6.3%

8.0%

10.2%

3% inflationary increase

5.0%

6.5%

8.5%

11.1%

% spent on electricity of a R15,000 p.m. net salary

2009/2010

2010/2011

2011/2012

2012/2013

6% inflationary increase

6.6%

8.4%

10.7%

13.6%

3% inflationary increase

6.6%

8.7%

11.3%

14.9%

For consumers who have a net monthly income of R15,000.00, the situation is worse. In the suburbs, such a consumer would currently be paying an average of 6.6% of his salary on electricity. Assuming a 6% annual salary increase, this consumer‘s electricity costs would rise to almost 14% of his monthly net income.


 
 
 
study-it-onlinespaceacreBusiness Profilesdecor-and-furniturejane-shonfeld
 
   
 
 
 
  Accomodation
Accommodation


Online Foreign Exchange
Foreign Exchange


Directory
Directory


Fax
Fax 2 Email


Finance
Finance


Furniture
Furniture


Casino
Online Casino


Restaurant
Restaurant


Auctions
Shop Online


Study IT
Study IT Online


Web design
Web Design


Weddings
Weddings


Work
Work from Home
 
 
 
 
 
Company News
 
 

 

© 2019 www.gbn.co.za. All rights reserved.

Daily Newsletter Subscription

 

Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Name:
Email Address: