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Power Hikes Will Shut Down Business| News by Staff Reporter
Manufacturers will appeal the National Energy Regulator’s planned increases
South African manufacturers have announced that they will appeal the planned electricity hikes by Nersa, saying the increases would put many of them out of business.
This is according to Business Day, who on Wednesday reported that many manufacturers would be unable to keep up with the rising costs of electricity and would be forced to shut down.
“Manufacturing accounts for 15,6% of the economy’s overall output, down from 22% several years ago. It contracted by 7% in the second quarter of this year, curbing economic growth to just 1,3% during that period,” Business Day reported.
Price cuts for distressed industries were needed, as well as reductions in the proposed 25% electricity price hikes pencilled in for the next couple of years, Stewart Jennings, chairman of industry group the Manufacturing Circle told the paper on Tuesday.
Electricity prices for manufacturing had climbed 140% in the past four years, making it one of the main drivers of rising costs for industry, Mr Jennings told Business Day.
Mr Jennings told the paper that a White Paper on the Manufacturing Circle’s appeal for reductions would be submitted to the Nersa (National Energy Regulator of SA) before the end of the year.
“We have to attack these militant price increases ... we can't afford another two years of 25% increases. We will fall out [of business], we are already falling out,” Mr Jennings said.
Read the full article on Business Day here.