The news that ESCOM will increase 24.8% this year, 25.8% in 2011 and 25.9% in 2012. What does this actually mean?
For every R1 of electricity you spend today, after the three hikes you will spend R1.98 in 2012, that mean basically that your electricity bill will be doubled.

The good part is that is it not 35%, the increase per annum that Escom was looking for.

According to Nersa (National Energy Regulator) that approved the increase, the effect on inflation will be less than 1.5% per annum.

The effect on your household, business and government.

The first effect will be on the disposable income. If you are single or head of a household, because of the rise in electricity and inflation you will have less money to spend.

Businesses that is allready suffering, will not be able to keep going on under the higher cost and will be forced to shut down.
According to SACCII (The South African Chamber of Commerce and Industry) 250 000 jobs may be lost.

The mines that is allready struggeling is under more pressure because they are big users of electricity.

Unions is going to put pressure on the industry for higher salaries.

Intrest rates cuts will be on an end, because of higher inflation.

This bring us to the Government. With the inflation that is going to rise, inflation targets will be more difficult to reach. Welfare spending will have to increased.

This brings us to the last obstacle, the World Cup Soccer. Hope the people providing accommodation took the pending rise in electricity intro calculation when they advertised and perhaps done the booking already. Will Eskom be able to provide enough electricity and that there will be no problems.

The recession end, and now in its place is Eskom.