West Cape News (Cape Town)
Siyabonga Kalipa
9 July 2009
Township businesses say recent electricity price hikes will dent their profits because struggling customers may be unwilling to carry the burden if they increase prices.
While none of the businesses interviewed have increased prices after Eskom rates increased by an average of 31.3% at the beginning of July, all of those interviewed say they will have to consider raising prices.
Khayelitsha medical doctor Dr Khungelwa Mrwebi said the increase came at the wrong time of year because the surgery waiting room needed to be kept warm in winter.
She said she was running a business and this needed to be sustained otherwise she would run at a loss, but at the same time she was working in a poor community and any price adjustment would have to take this into account.
Khayelitsha hair salon owner Gina Eyong, who operates from a container, said: "Electricity is very expensive and in my kind of business we use it a lot. I have blow dryers here, machines to cut hair and I play music the whole day to entertain my clients."
But Eyong said some of the cost would have to be carried by her business because her clients were low income earners.
"I can't really increase my prices even though it will cost the business," she said.
And Khayelitsha shebeen owner Toto Mveli said: "Electricity has always been a factor in our business. Everyday we must have our fridges on to keep the beers cold and we also play music the whole day, especially on weekends."
With electricity prices increasing, he would be forced to raise prices and risk chasing customers away.
"This increase is really bad not just for us business owners but for people in the community as well."
Cosatu spokesperson Patrick Craven said it was the poor who would suffer the most from the tariff increase.
"When companies seek to recover the increase cost of electricity they will charge more to consumers," said Craven.
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