How government is scoring big from load shedding

Pick n Pay Chairman Gareth Ackerman has said that the South African government is receiving millions of rands as a “windfall tax” due to load shedding. According to Ackerman, 37% of the group’s diesel costs go straight to the government through the Road Accident Fund (RAF) levy. Ackerman has called this “shocking and unconscionable.” For the year ending February 2023, Pick n Pay reportedly spent R522 million on diesel to keep operating amid record levels of load shedding. Ackerman said that without this unnecessary cost, the group’s results would have beaten its own forecasts and those of many external commentators. Despite requests by the retail industry to be included in the government’s diesel rebate package, food retailers like Pick n Pay and Shoprite were not exempted. The costs associated with load shedding are costing the South African economy billions of rands each month, and the South African Reserve Bank has estimated that load shedding will wipe a full two percentage points from the country’s GDP growth in 2023. Ackerman said that daily blackouts have become the new reality, and that no company can absorb these costs indefinitely. Pick n Pay is working to mitigate the impact of load shedding through initiatives such as investing in energy-efficient LED lighting, using automated controls to switch off certain equipment during load shedding, and reviewing the optimal refrigeration footprint. It is also trialling in-store battery energy storage solutions to operate supermarkets sustainably through load shedding. The group is targeting diesel cost savings of at least R200 million in FY24, driven by these initiatives. However, the group believes that consumers will ultimately have to absorb some of these additional costs over time.

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