Eskom's tariff increase will be hard on consumers in the medium term, consultancy Frost & Sullivan said on Thursday.

Earlier the National Energy Regulator of SA (Nersa) announced it had given state-owned electricity provider Eskom a 31.3 percent tariff rise for the 2009-10 financial year.

This was just short of Eskom's request for a 34 percent tariff hike.

"The increase will be hard on consumers in the medium term, but we maintain that a long-term view needs to be taken on this issue," said Frost & Sullivan's energy industry manager Cornelis van der Waal.

"These decisions must be taken in the interests of the country's economic development, the sustainability of industry and ensuring a reliable supply of electricity," he said.

Hiking tariffs now was the best way to support these long-term goals, Van der Waal said.

Eskom – which supplied 95 percent of the country's power – had been battling to cover cost increases while embarking on a five-year expansion programme.

The electricity supplier had said it required over R150-billion to fund a R385-billion expansion plan to build new power stations.

According to Nersa, Eskom's tariff hike would come into effect on 1 July and would last until 31 March 2010.

Eskom would submit another request for a tariff increase later in 2009 that would include a three-year period to the end of March 2012.

Sapa

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