Eskom will soon go broke, will not be able to afford fuel as Russia-Ukraine conflict continues

The Russia-Ukraine conflict is skyrocketing fuel prices as it reaches record highs. Eskom’s Chief Financial Officer (CFO) Caleb Cassim stated that the utility is monitoring fuel costs closely.

Eskom has implemented load shedding across South Africa. The embattled power utility is trying to make up for a number of unit breakdowns through the use of emergency fuel. However, it might not be able to do so for much longer.

Cassim stated that Eskom cannot continuously rely on diesel due to financial constraints.

“We don’t have a blank cheque to continuously depend on diesel. Based on what we receive from the regulator, based on the government equity that we have and at the end of the day, we’ve got commitments to make.”

Eskom briefed the country on the national power grid’s state on Tuesday, 8 March. While diesel may not be a long term option, Cassim revealed that the utility has other avenues.

Cassim stated that if diesel doubles in price, they should look at generation performance. The cash flow perspective of things makes it difficult for Eskom to continue with diesel-based power.

“Eskom, from a cash flow perspective, can only afford so much for diesel and we’ll get to the point where we won’t have funds to pay for additional diesel beyond a certain point.

“We should look at the performance of the generation and that’s the are we need to address to mitigate loadshedding,” said Cassim.

The price of fuel is expected to increase even more as the United States of America stops Russia’s oil imports. Russia is the world’s second-largest oil producer.

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