27/07/2017 08:58 SAST | Updated 27/07/2017 08:58 SAST

Is Eskom Fleecing South Africans For Electricity Costs?

A lobby group says electricity prices in South Africa should be four times lower.

Siphiwe Sibeko / Reuters

Are South Africans being fleeced for electricity? The Times reported on Thursday that a lobby group says South Africans are being charged almost four times what they should be by Eskom.

Eskom also wants a 20 percent tariff increase from the National Energy Regulator of South Africa (Nersa). Nersa starts public hearings into proposed electricity price increases in Pretoria today.

The Organisation Undoing Tax Abuse (Outa), in its presentation to Parliament's public enterprises portfolio committee reportedly shows that Eskom is relying on South Africans, not its own budget, to sustain it.

Outa's energy specialist Ted Blom reportedly told Parliament that the electricity tariffs that South Africans are currently paying is are "daylight robbery". He said the average four person household in South Africa should be paying R290 a month for electricity, but was paying close to R1,200.

"There are three cost drivers to the power utility. They include the financing costs of money borrowed, their power plants and the operations," he said.

Blom reportedly said Eskom needed to borrow R325 billion over the next five years to finish the Medupi and Kusile power stations, which was 10 times higher than the initial price estimates.

Eskom told The Times it would not respond to allegations through the media.