Swaziland: Electricity prices to sky rocket

26 February 2010, The Swazi Observer
URL: http://www.observer.org.sz/index.php?news=11433

Mbabane: The Swaziland Electricity Company (SEC) has confirmed that it will increase electricity by 25% in April following South Africa’s energy regulator, Nersa’s grant of 24.8% increase to Eskom.

Nersa granted Eskom the right to increase tariffs in April but not by the 35% initially requested by the company.

SEC Marketing Manager James Mabundza said they would be left with no choice but take the full weight of the increase into the price of the product since they imported 80% of their electricity from Eskom. He also revealed that when Eskom charge its importers, it added 0.5% to the initial increase, which means the increase in Swaziland will be 25.3%.

Mabundza pointed out that even the company from which they import in Mozambique also tracked Eskom’s prices and the likelihood was that they would also increase prices. The increases granted to Eskom would run for three years, with a further increase of 25.8% (26.3% local) guaranteed next year.  In 2011, Eskom will increase prices by 25.9% (26.4% local) and by that time, the costs of electricity is expected to have taken a huge toll on consumers.  “We normally look at the prices of our imports and plug those into the price at which we sell to the public. If the price of imports increase, the local price automatically increases,” he said.

Consumers, especially the poor, will feel totally undone by the latest developments, especially following a recent outcry over the E55 service charge imposed by SEC. That could hardly be considered a concern with the latest developments.

Mabundza said they would only be in a position to determine the exact cost to the consumer once they plugged the new price into their business model. He said this was a very complex process, hence he would not be in a position to even illustrate how the new cost structure would look like.  “If Eskom’s increased charges start in April, the likelihood is that we will also increase our prices in the same period. We have to do that if we are to stay in business,” he said.