One of the recent justifications for price increases, by one of our suppliers in Belgium — apart from the prevailing raw materials shortages and cost increases — is that in the past 12 months they have had a 40% and then 50% electricity price increase. I am not sure from what sort of base this is, but it makes our proposed increase look almost reasonable.
A friend who imports paper products from Scandinavia told me recently that they have had more than 100% electricity cost increases, and because of this and other unstable prices factories will no longer quote fixed prices for their products but are quoting gate prices, decided as the products leave the factory. All very scary.
This makes me wonder how they arrive at these increases if it is a country producing mainly clean energy from hydro or wind farms, and how this will affect us in the longer term as we move in that direction.
David Wantling
Mowbray
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.