Eskom tariffs could increase by almost 9% next year

South African consumers could be paying more for electricity from next year, with the National Energy Regulator of South Africa (NERSA) considering an average tariff increase of 8.8% for Eskom customers from 1 April 2027.

The proposed adjustment is part of NERSA’s consultation process for Eskom’s 2027/28 Retail Tariff Structural Adjustment (ERTSA).

The regulator has invited consumers, businesses and other interested parties to comment on the proposal. Submissions close on 2 October 2026, after which NERSA will make its final decision.

The latest proposal comes after Eskom’s direct customers received an 8.76% tariff increase in April this year. Customers supplied through municipalities saw increases of around 9% from July.

NERSA revises previous tariff decisions

The latest figures are considerably higher than the increases NERSA originally approved for Eskom.

The regulator initially approved increases of 5.36% for 2026/27 and 6.19% for 2027/28. These figures were subsequently reviewed after NERSA identified errors in its calculations.

Following the review, the increases were revised upwards to 8.76% and 8.83%.

NERSA said the revised tariffs were aimed at maintaining Eskom’s financial viability while taking the impact on electricity users into account.

Proposed changes to electricity charges

The consultation is not limited to the overall tariff increase. NERSA is also considering changes to the way Eskom charges customers.

Among the proposals are fixed service charges for residential customers.

Eskom has indicated that certain charges need to be made more cost-effective, with adjustments to energy rates designed to ensure that the overall increase remains around the proposed 8.8%.

Eskom reports stronger financial performance

The proposed tariff hike comes despite Eskom recording a significant improvement in its financial results.

Reuters reported that the power utility made a R30.3 billion profit in the financial year ending March 2026. That is more than twice the R14 billion profit recorded a year earlier.

At the same time, Eskom's electricity sales volumes declined by 6.2%. Money owed to the utility by municipalities also continued to rise, increasing by 17.9% to R111.6 billion.

Eskom has nevertheless made considerable progress in stabilising electricity supply. During the 2025/26 financial year, rolling blackouts were recorded on just four days, compared with 329 days in 2024.

For consumers, however, the improved reliability of the electricity system comes against the backdrop of steadily rising tariffs.

Households and businesses are increasingly looking at alternatives such as solar power to reduce their dependence on Eskom.

It is important to note that the 8.8% figure is still a proposal and has not been approved as the final increase.

NERSA will consider public and stakeholder submissions received by 2 October before announcing its final decision on Eskom's 2027/28 tariffs.

Consumer inflation slows in July 2026

The headline inflation rate cooled for the first time in five months, declining to 4,3% in July from 5,0% in June. The monthly increase in the consumer price index (CPI) was 0,2%, down from 0,7% in June.

The slowdown can be attributed to three main factors: softer inflation for food & non-alcoholic beverages (NAB); lower municipal tariff increases; and a decline in fuel prices.

Food inflation lowest in 16 years

The annual rate for food & NAB declined to 0,9% in July. This is the lowest print for food & NAB in more than 16 years, since June 2010 when it was 0,7%. Incidentally, that was the month when South Africa hosted the FIFA World Cup.

The lower rate for food & NAB in July 2026 was mainly due to cereal products and meat. Cereal products recorded an annual change of -2,0%, down from -1,5% in June. Several products recorded softer monthly rates, most notably maize meal (-3,1%), macaroni (-0,7%) and white bread (-0,6%).

Annual meat inflation slowed to 1,5% from 5,1% in June. Unprocessed beef products reflected negative annual price changes, with stewing beef at -7,9%, beef steak at -6,1% and beef mince at -5,8%. However, several processed meat products recorded an increase, including corned meat (+11,8%), meat patties (+7,8%), russians (+7,7%) and sausages (+6,2%).

Food & NAB categories that registered higher annual inflation rates in July include fruits & nuts; fish & other seafood; vegetables; oils & fats; cold beverages; and milk, other dairy products & eggs. Oils & fats, for example, saw its rate rise from 2,3% in June to 2,8%.

There are 144 food and beverage products in the CPI basket. The graph below shows those that recorded the largest price changes in July. Several fish products recorded sharp monthly increases, including battered or crumbed fish portions (+3,5%); fish fingers (+2,3%); hake (+2,1%); and canned fish (excluding tuna) (+2,0%).

Municipal tariff increases softer in 2026

Municipalities implement their tariff increases in July each year. Most CPI tariff categories saw lower increases in 2026 than in 2025. Electricity tariffs rose by 8,1% in 2026, down from a rise of 10,4% in 2025. A similar pattern was recorded for water tariffs (10,2% compared with 12,1%) and refuse removal (4,7% compared with 6,6%).

In contrast, sewerage tariffs increased by 7,8% in 2026, higher than the 6,5% rise recorded in 2025. Property assessment rates increased by 4,9% in both 2025 and 2026.

Fuel prices retreat in July


Annual transport inflation cooled to 8,9% in July from 12,7% in June, mainly due to lower fuel prices. Petrol prices decreased by 7,1% and diesel by 11,7% between June and July, pulling the annual rate for fuel down to 20,6% from 34,3% in June. Despite the monthly decline, petrol is 19,3% and diesel 28,8% more expensive than a year ago.
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Government outlines plan to lower electricity costs

The South African government has outlined measures aimed at reducing electricity costs while keeping tariffs cost-reflective and protecting vulnerable households and key economic sectors.

The proposals are contained in the Revised Electricity Pricing Policy, which updates the 2008 policy and was approved by Cabinet for public comment last month.

Electricity and Energy Minister Kgosientsho Ramokgopa said tariffs have increased by about 977% since 2007, highlighting the need for a new pricing framework.

10-year electricity price forecast

The policy will require the National Energy Regulator of South Africa (NERSA) to publish a 10-year electricity price forecast, giving businesses and investors greater certainty when planning long-term investments.

It will also establish a framework for transparent, efficient and cost-reflective tariffs while preventing hidden costs from being passed on to consumers.

More competition in electricity market

Government is also opening the electricity market to greater competition as part of reforms aimed at reducing Eskom's dominance.
The new framework will allow generators and electricity users to enter into bilateral supply agreements outside of Eskom, supporting the transition towards a wholesale electricity market.

Stronger protection for vulnerable households

The policy will strengthen support for poor and vulnerable households while tackling the impact of unpaid municipal electricity debt.

Ramokgopa said consumers who pay their electricity bills should not be forced to carry the cost of those who do not.

Government also plans to modernise the administration of free basic electricity by creating a central database linked to Home Affairs and social grant records. This is intended to make it easier to identify households that qualify for assistance.

Support for energy-intensive industries

Government will also introduce a Negotiated Pricing Agreement mechanism to support electricity-intensive industries, including businesses that are not currently in financial distress but could contribute to economic growth and job creation if given more competitive electricity prices.

Ramokgopa said the overall objective is to improve efficiency in the electricity sector and create conditions that could ultimately result in lower electricity costs.

Nelson Mandela Bay aims to restore domestic electricity tariff after court order

The Nelson Mandela Bay Municipality says it will implement a High Court order requiring the restoration of the Inclining Block Tariff (IBT) for qualifying domestic electricity customers for the 2026/27 financial year.

The order, agreed to by the parties in relation to Part A of the legal proceedings, provides a framework for reinstating the tariff, subject to approval from the National Energy Regulator of South Africa (NERSA).

The municipality said it respects the court’s decision and will implement the order transparently and within the required timeframes.

Executive Mayor Babalwa Lobishe said the municipality understands the impact rising electricity costs have on households, pensioners, students and businesses.

“When residents expressed concern, we listened. When the court provided clarity, we accepted our constitutional responsibility to implement its order,” Lobishe said.

The municipality confirmed that qualifying domestic electricity consumers will not need to apply for credits. Once regulatory approvals and technical adjustments are completed, credits will automatically be processed through municipal billing systems.

The court order requires the municipality to:
Restore the IBT for qualifying domestic electricity users;
Obtain the necessary NERSA approval for tariff amendments;
Apply the restored tariff retrospectively from 1 July 2026; and
Allocate credits to affected customers.

A multidisciplinary implementation team has been established, including officials from Legal Services, Electricity and Energy, Revenue Management, Finance, IT, Customer Care and Corporate Services.

The team is responsible for securing approvals, updating billing systems, identifying qualifying accounts, recalculating charges and ensuring accurate credit allocations.

The municipality stressed that agreeing to the interim court order does not amount to an admission that the original tariff structure was unlawful. It said the tariff formed part of the 2026/27 Budget and Tariffs adopted after following required public consultation and statutory processes.

The legal challenge consists of two parts, with Part A dealing with interim relief while Part B addresses the broader review proceedings.

Mayor Lobishe said the municipality remains committed to transparency and accountability throughout the process.

“We are committed to implementing the Court Order professionally, fairly and transparently while ensuring that residents remain informed throughout every stage,” she said.

The municipality said further updates will be provided as regulatory approvals and implementation milestones are reached
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