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Middle-income earners expected to be hardest hit by electricity price increase

South Africans will be paying a lot more for electricity this month after Eskom increased tariffs by 15.63% on 1 April.

This comes after Eskom and the National Energy Regulator of South Africa came to an agreement on Eskom’s allowable revenue for the financial year of 2021/2022.

According to FNB, middle-income households will be particularly hard hit by this increase.

Data by the retail bank shows that middle-income households spend a large portion of their income on electricity. The amount spent on electricity by customers that have an FNB Entry Market (Stay Easy) bank account increased by 9% on average between 2019 and 2020.

Over the same period the amount spent by middle-market (Gold Account) holders increased by 15% and increased by 14% for the more affluent (Premier Account) customers.

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Says Rob Gwerengwe, chief executive of the Middle Market segment at FNB: “The reality is that all customers will need to factor a 15% increase on what they have been spending on electricity on a monthly basis.”

In a scenario where a household would normally spend R500 on electricity, they should budget for an additional R75 to account for the increase.

Continues Gwerengwe: “Unfortunately, this increase comes at a time when customers are heavily strained financially and these financially stressful times require every individual to scrutinise their budget a lot closer.”

First published on Daily Friend