South Africa’s electricity pricing system is increasingly criticized as unfair and unsustainable, with rising tariffs placing disproportionate pressure on low-income households. Following Eskom’s 2025 price increase, municipalities such as eThekwini are applying to Nersa for further hikes. EThekwini is proposing an average increase of 10.5%, which could push electricity costs above R4.16 per kWh, alongside new fixed “wire fees” with no clear cost basis.
The problem goes beyond rising prices to how increases are implemented. Electricity is being treated as a revenue tool rather than a public good, forcing households to cut usage, turn to unsafe alternatives like paraffin and wood, or go without power when prepaid meters run out. This widespread “self-disconnection” is often absent from official data, hiding the true depth of the crisis.
At the center is the policy of cost-reflective pricing, which aims to align tariffs with supply costs but in practice shifts the financial burden of Eskom and municipal inefficiencies onto consumers. As electricity becomes more expensive, people use less, prompting further increases to recover lost revenue and creating a damaging cycle. New tariff structures and fixed charges also tend to favor high-usage households while penalizing low-usage, poor users, effectively redistributing costs from the poor to the wealthy.
Transparency is another major concern. Key details about municipal pricing models and cost assumptions are often not publicly accessible, leaving consumers uncertain about what they are paying for. Environmental and health costs from coal-based energy, particularly in the Highveld, are excluded from pricing decisions despite their impact on communities. Compounding this, municipalities rely on electricity sales to fund other services. While some cross-subsidisation is expected, the current system forces tariffs to serve as both a basic service and a revenue stream, making the poorest residents cover broader local government budget gaps.
Critics argue that Nersa’s focus on cost recovery over affordability is too narrow and fails to address deeper structural issues. Without a comprehensive overhaul of how electricity is priced, funded, and regulated, the system risks becoming more unequal and unstable. Calls are growing for a transparent, inclusive review that prioritizes fairness, protects vulnerable households, and supports a just energy transition. Without reform, rising tariffs will continue to erode access to electricity, undermining economic participation and quality of life for millions of South Africans.
