Ultimate magazine theme for WordPress.

Shock power tariff increase in the pipeline

Caswell Tlali

MASERU — The Lesotho Electricity Company (LEC) wants to increase power tariffs by a whopping 25 percent.
The company has already applied to the Lesotho Electricity Authority (LEA), the regulator, for permission to increase the charges.
Following that application the LEA is now inviting public comments until Friday before making a ruling on the percentage increase.
“The general public is informed and further invited to make and forward their comments and inputs on the application for consideration before LEA makes a final decision,” said the LEA in a statement last week.
The LEC made the application on April 30.
“Those who wish to present their views before the LEA board at a public consultation meeting are requested to indicate so in writing, when submitting their comments.”
If the application is approved a family that used to spend M100 on electricity every month will now have to pay M125.
The increase is coming at a time when most families are already grappling with galloping food and fuel prices.
The LEC is seeking an increase that is way over the annual inflation rate which is just under four percent and is used by most businesses to review wages.
Few companies have awarded wage increases above the inflation rate this year.
This means a 25 percent tariff increase will only make workers poorer.
The government, for instance, gave a five percent salary increment to civil servants.
Old age pensions were also increased by 16 percent.
Trade unions have warned that the increase could push more people into poverty.
The Lesotho Workers’ Party leader Macaefa Billy who also leads the Factory Workers’ Union said the LEC should not put profit ahead of public interest.
Billy said the 25 percent tariff increment was too steep for many people.
“How can the government pledge to create jobs when it scares investors by allowing such a ridiculous electricity tariff increment?” Billy quizzed.
“We do not want anything that will threaten the availability of jobs in Lesotho,” he said.
Middle and low income earners would be the hardest hit by the increase.
Billy added that people earning a net salary of M5 000 and less per month salary will struggle to make ends meet when the LEC hikes its tariffs.
Factory workers, drivers, construction workers and others who are paid less than M2 500 per month would be the most affected.
“This class of workers already finds it difficult to buy electricity that lasts for a month,” Billy said.
“Some are so poor that they buy a small amount of units just to light their houses and switch on televisions and radios,” he added.
“With this increment they will lose any hope of ever buying electric appliances such as stoves because they will not afford to pay for electricity.”
The Private Sector Foundation of Lesotho’s chief executive, Thabo Qhesi, told the Sunday Express yesterday that the increase is likely to discourage foreign direct investment into Lesotho.
“Many foreign investors choose to invest in Lesotho because our electricity tariffs are low compared to South Africa,” Qhesi said.
“If we want to push our tariffs up to match South Africa, we will be reducing our attractiveness to foreign investors,” he said.
Last year LEA allowed the Lesotho Electricity Company to hike electricity charges by 17 percent.
The LEC had applied for a 24 percent tariff increase arguing that its power suppliers from South Africa and Mozambique had also reviewed their prices.

Comments are closed.