Minister for the Department of Public Enterprises Pravin Gordhan on Wednesday told Parliament that decision on a further allocation for Eskom to buy diesel was imminent to curb higher stages of load shedding at the utility.
This as the utility has resorted to doubling its annual budget after burning through R12 billion of diesel to date.
Responding to questions from the Standing Committee on Appropriations, Gordhan said the 2000 megawatts Eskom generated from its Open Cycle Gas Turbines (OCGT) was not negligible. Hence, it was important that they be given support as lack of funds to purchase diesel had led to higher stages of load shedding.
“Eskom has utilised more cash on diesel than Nersa (National Energy Regulator of South Africa) allows to be recoverable through its revenue streams. We will find the money, hopefully within the next few days or even sooner, we will be able to have made a decision,” Gordhan said, indicating that government will issue a statement late on Wednesday.
Unconfirmed indications are that the National Treasury could supplement Eskom's diesel by up to R15bn to carry it through to the April timeline for its own procurement systems to kick into place.
This is as Nersa keeps a hawk's eye on the load factor at which Eskom is allowed to run its emergency diesel reserves to be allowed to recover the cost from consumer through the electricity tariffs.
If that load factor is exceeded, the utility must prove that the additional spending was efficient before it can be recovered through the tariff.
Gordhan has met with Eskom's executives, including newly appointed chairperson Mpho Makwana, over the weekend over the funding for diesel as more and more of Eskom's power stations suffer breakdowns.
At the utility’s last briefing, Eskom's chief operating officer, Jan Oberholzer, said the utility would no longer use its OCGT's to keep the lights on because it had exhausted its funds to purchase diesel and only anticipated restocking on April 2023.
Citibank economist Gina Schoeman, this week, said if the government did not step in to fund Eskom’s diesel cost, the results for the economy would be devastating.
She said an additional amount on top of the R23bn National Treasury gave Eskom every year should be feasible in light of government’s revenue overrun.
“This was used to improve the fiscal position and has given the budget credibility, but there is still some room” to find money for Eskom,“ she said.
Eskom is battling problems all from all fronts and on Wednesday confirmed that another coal delivery truck driver was this week arrested at the Camden Power Station after he was found in possession of sub-grade coal destined for Eskom.
The truck belongs to a transporter that is contracted to deliver coal to Eskom. Two other truck drivers were arrested at the same power station while in possession of stolen coal two weeks ago.
BUSINESS REPORT