Acting Municipal Manager Roland Butler says the council has declared a local disaster in relation to the drought and loadshedding.
Butler says they must reduce their consumption immediately or face the intermittent supply of water.
He says all areas in Knysna are under severe strain and appeals to residents to reduce water consumption urgently and drastically.
Butler says they are carting water to Buffalo Bay and cannot keep up with demand.
He says the Goukamma River is saline and the water cannot be treated for human consumption.
Butler says the Buffelskop reservoir level is extremely low due to the increased and continuous demand, and loadshedding and technical difficulties have hampered their efforts to fill the reservoir.
Meanwhile, trucks are delivering water to Sedgefield too.
Butler says the approximate historical rainfall figure for the greater Knysna during November is 85mm.
This figure has dropped to only 2mm this year.
