Ramokgopa concedes no targeted study has measured tariff impact on poor households

Electricity Minister Kgosientsho Ramokgopa has stated that his department has not carried out a specific study to gauge the impact of rising electricity tariffs on low-income households as South Africans face proposed hikes. When questioned by IFP MP Nompumelelo Mhlongo, Ramokgopa revealed that the department's analysis indicates that electricity tariff hikes have been outpacing the Consumer Price Index over time.

Mhlongo inquired about the department's assessment of the impact of tariff increases on low-income households and small businesses as well as the measures taken to alleviate escalating electricity costs as of August. "The department has not conducted any targeted assessments," Ramokgopa told the parliamentary panel. He added that data analysis had shown that electricity tariff increases have been higher than the Consumer Price Index over the years.

The Electricity Pricing Policy, which aims to curb the upward pressure on electricity costs, is currently under review. The policy, approved by Cabinet on July 30, 2026, and published for public comment on August 28, 2026, states that the existing Electricity Pricing Policy is no longer completely in sync with the evolving electricity sector.

Ramokgopa emphasized that the revised policy framework would define clear pricing principles, facilitate market outcomes, and ensure regulatory certainty. The Electricity Pricing Policy is set to be implemented gradually over five years, aimed at avoiding abrupt price shocks and enhancing tariff predictability. It also includes ring-fencing of electricity revenues and standardized tariff methodologies for municipalities, as well as free basic electricity and lifeline tariff mechanisms to assist qualifying households.

Ramokgopa addressed the concerns of EFF MP Lorato Tito regarding the uncertain impact of the energy sector's transformation on household cost pressures. "The electricity price is influenced by various factors, including generation costs, the condition of transmission and distribution networks, municipal surcharges, debt levels, maintenance requirements, fuel costs, and the need for new capacity after years of under-investment," Ramokgopa explained.

"However, I do not agree with the notion that the current energy sector transformation is merely an institutional restructuring exercise. The goal is to tackle the structural weaknesses that have led to unreliable electricity supply, inadequate investment, limited grid capacity, and increasing system costs." The Electricity Regulation Amendment Act provides legal framework for a more competitive and transparent electricity supply industry, according to Ramokgopa.

It allows non-discriminatory access to the transmission network, establishes an independent transmission system operator, enhances system planning and operation, and gradually develops a wholesale electricity market. The minister acknowledged the economic hardship faced by ordinary households due to unreliable electricity and rising costs.

In response, the Department of Electricity and Energy is implementing measures aimed at affordability and protection of vulnerable households, such as Free Basic Electricity, support for indigent households, distribution sector improvements, and more sustainable approaches to universal energy access.