Embattled consumers struggling to meet rising costs are to get a slight reprieve after it emerged that the government has decided to raise electricity tariffs by less than previously thought.

A report in Business Day stated that Eskom, the state-owned national utility, is likely to ask the National Energy Regulator of SA (Nersa) for a 34% hike in electricity bills for the coming year, sharply lower than the 88% previously expected.

A 25% rise in prices would cover increases in operating costs rather than the cost of Eskom’s new build programme and would also be in line with the agreed increase of around 25% a year at last year’s National Electricity Summit.

The lower than expected increase is reported to follow talks in the government, in which the Department of Public Enterprises was persuaded to settle for a lower increase.

Although the Summit ended with the agreement that electricity prices would rise annually between 20% and 25% a year for the next three years, it had been thought that Eskom could be granted a far higher increase.

The Treasury has already agreed to inject R60bn of capital into Eskom over three years and to guarantee R176bn of new and existing debt.