Tag: fees

Petrol price triples in a decade

By James de Villiers for Business Insider SA 

The price of a litre of petrol in South Africa increased from R6.92 in July 2008 to R15.53 in July 2018 at the coast, and from R7.16 to R16.02 inland – nearly tripling in the last decade.


Infographic: Fin24

Over the same period, the tax (or fuel levy) on a litre of petrol increased from a low of R1.27 in July 2008 to R3.37 in July 2018.

This means the tax on fuel increased by 165.35% in 10 years.

On Sunday, the department of energy announced that a litre of unleaded petrol will increase by 26c, pushing the price of a litre past R16 in the inland for the first time.

Energy Minister Jeff Radebe ascribed the increasing petrol price to the rand’s poor performance to the US dollar.

Radebe said the increase would have been 20c more if it wasn’t for declining oil prices.

By Scott Duke Kominers for Bloomberg 

How much is your privacy on Facebook worth?

This question has seen renewed attention following the revelation that political analysis firm Cambridge Analytica, hired by the Trump election campaign, gained access to the private information of more than 50 million users. One of the possible responses that’s generated some discussion is the creation of a paid tier that’s free of ads and data sharing. 1 Such an option would likely be socially beneficial and have considerable public appeal. But my guess is that it would be pretty expensive, too.

Let’s start with some rough calculations. Facebook’s annual ad revenue was about $40 billion in 2017, with 2.13 billion monthly active users. That means the average user is worth roughly $20 in ads to Facebook a year. That’s probably already a lot more than many users would pay for privacy on the social network.

But the price also depends on who would choose to pay for greater privacy. And it’s likely that many of the users who would opt for more protection could be worth more than $20 each to the company.

Why’s that? First, the value of keeping your data private increases with the amount of data you provide on the platform; by the same token, the more data you give Facebook, the better it can advertise to you. Similarly, you might find privacy especially valuable if there’s something unusual or unique about you that makes you especially easy to target.

The people who can afford a paid tier are on average wealthier; that too makes them more valuable to advertisers. And some of them already have browser ad blockers, so it’s hard to reach them via other channels.

To make up for those sorts of customers opting out of data sharing, Facebook would have to charge a lot more than the average of $20 just to break even. A back-of-the-envelope estimate based on the Pareto principle — 80 percent of the ad revenue coming from 20 percent of users — suggests that if mostly high-value users purchase privacy, then Facebook would need to charge closer to $80 a year.

That’s much more than even high estimates of the value most people attach to having access to Facebook. And it’s still a substantial underestimate of the likely price. According to Facebook’s annual report, the company’s 239 million North American users are responsible for a bit less than half of ad revenue; applying the Pareto principle to them would suggest annual privacy prices in the range of $325 a person.

If price alone were the question, Facebook might indeed want to charge huge amounts for enhanced privacy. The users who buy out won’t all be the most valuable users, and it would be pretty lucrative if the company could sustainably charge some customers much more for privacy than the annual ad revenue they generate. But that’s unlikely to work out in the long run.

Putting a high price on privacy would make it clear just how much Facebook’s user data is worth. We’d probably see increased calls to share that value by giving users a portion of revenues. The consumer-led drive for increased privacy would likely accelerate, too, prompting a growing number of users to leave the platform (assuming they can’t afford or are unwilling to pay for greater privacy).

A user exodus plus enhanced scrutiny of data practices would quickly eat away at the profits from offering the paid tier, making the whole thing a losing proposition.

Facebook must have run the numbers on this already, using much better information than we have here. The idea of a paid tier isn’t new; if Facebook hasn’t offered such an option, the company probably thinks it would be a money-loser. So if we want Facebook users to have control over how their data is shared, we may need outside pressure. The company isn’t likely to provide the option on its own.

It’s also worth noting that advertising and data sharing don’t have to be completely coupled. Facebook could enhance privacy directly by adopting data protection strategies based on privacy science, as Apple, Google, and the Census have in some of their applications.

The National Credit Regulator (NCR) will investigate Standard Bank’s new credit card fee, according to a report in the Sunday Times.

The bank has been charging a standalone monthly “card fee” of between R10 and R210 to customers who use its credit cards only, with the fee depending on the type of card the customer uses.

The card fee was implemented at the beginning of 2018 and is charged in addition to the monthly service fee of R40.

According to the NCR, the Credit Act has a closed list of charges a credit provider can levy on customers – and the card fee is not one of them.

The NCR said it would investigate Standard Bank’s card fee and take approporiate action if the fee is found to be illegal.

According to Standard Bank’s pricing guide for 2018, the card fees are as follows:

Gold, Blue, and Access cards – R10.00
Titanium standalone – R25.00
Platinum standalone – R40.00
World Citizen standalone – R210.00

The report follows SA Consumer Satisfaction Index results in 2017 showing that Standard Bank customers are the least satisfied.

Standard Bank did not respond to requests for comment sent by the Sunday Times.

Source: MyBroadband

Finance Minister Malusi Gigaba said on Tuesday that power utility Eskom’s application for a 19.9% electricity tariff hike next year is “unjustified”.

Gigaba was addressing a business breakfast in Umhlanga, north of Durban, organised by the Durban Chamber of Commerce and Industry.

“To ask South Africans to pay more … when the economy is subdued and the mid-term outlook is as subdued as it is and we have the types of financial and leadership challenges that Eskom is now experiencing, I think that will serve as a perverse incentive,” he said. “We’ve got to be careful what we do.”

Eskom has asked National Energy Regulator (Nersa) to allow it to implement a 19.9% tariff hike for the 2018/19 year. Nersa is currently conducting public hearings into the feasibility of the increase.

Gigaba also called on the power utility to stabilise its finances, saying that public officials needed to be “circumspect” about how they manage public resources.

“All public officials needed to be conscious of the need to fight corruption, irregularities and inefficiencies to ensure that state-owned companies perform well,” said Gigaba.

“That’s why I think that the Eskom application for a higher tariff is unjustified, given the fact that on the other hand we have excess electricity.”

The finance minister told the business breakfast that Eskom must “incentivise” South Africans by improving its governance and employing what he termed “properly qualified executive leaders from CFOs (chief financial officers) to CEOs (chief executive officers) and all other executive directors”.

Mini budget

Gigaba criticised those who said his mid-term budget painted a bleak picture of SA’s economy and failed to boost confidence.

He delivered his maiden mini budget to Parliament in Cape Town last Wednesday.

The minister told the business breakfast that he had to present facts about the state of SA’s economy as they stand. “We gave an honest view of the challenges facing our country. We couldn’t go and spin ourselves to the country knowing all is not well. We couldn’t just go to Parliament and stand before the nation and lie.

“All the things that we said in terms of the country’s economic outlook for the medium-term budget were facts, as they stood before us, when we presented the statement,” he said.

“No minister of finance, worth their soul, would have presented anything different; they would have stated the facts as they are.”

Pay your taxes

Gigaba said everyone needs to pay their taxes, given that SA faces a R50.8-billion tax revenue shortfall.

And with National Treasury expecting GDP growth of only 0.7% this year, Gigaba said that “little social and economic transformation” could be expected without stronger economic growth.

He urged the private sector to join hands with government to boost the economy.

“Economic growth and transformation must become neutrally reinforcing principles. Government is doing its share and will continue doing so,” he said, mirroring what he said in his budget address.

“The private sector must bring something to the table, it must be a give and give situation,” he said.

Speaking of the state’s mounting debt, the finance minister said government doesn’t want to leave future SA generations facing a debt hole they won’t be able to manage.

“We need to give them a growing economy with less debt so that they could begin developing wealth for themselves and grow [the] economy of those who will come after them,” he said.

By Mxolisi Mngadi for Fin24

Vodacom bows to pressure to reduce prices

Vodacom will actively participate in the Independent Communications Authority of South Africa’s (Icasa) consultation process on the draft regulations regarding data expiry periods and out-of-bundle billing.

Vodacom told Fin24 that it was committed to the process of drafting new regulations, after the communications regulator stepped into the going feud between consumers and networks over the high cost of data.

“Vodacom is aware of the draft regulation gazetted by Icasa regarding data expiry periods and out-of-bundle billing,” a company spokesperson told Fin24 this week.

“Vodacom is committed to bringing down data prices and has brought down effective data pricing by 44% over the last three years.

“Through the likes of Just4You, which offers customers hourly, daily, weekly and monthly bundles, Vodacom has made significant inroads in recent years in its pricing transformation journey,” the spokesperson said.

The latest step by Icasa to join the #DataMustFall campaign was aimed at regulating data expiry dates, according to a notice published in the Government Gazette on Monday.

Icasa intends to encourage networks to extend the validity of data bundles.

“With regard to out-of-bundle billing, Vodacom reiterates its position on this matter in that it remains fully committed to addressing these and has already started to implement its plans,” Vodacom told Fin24.

“We remain committed to consulting with the regulator in our shared quest to continuously address customer needs and improve the customer experience,” the company added.

The public has until September 19 to submit comment.

Prior to the recommendation, the regulator announced it would hold an inquiry to try reduce high data costs. This inquiry will be conducted over four phases and completed in March 2018.

These phases include a market study, discussion document, public hearings, and findings document. Members of the public would have 45 days to submit comments following each phase, News24 reported.

By Kyle Venktess for Fin24

E-toll mess just gets messier

Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely.

Last week, the Organisation Undoing Tax Abuse (Outa) barred roads agency Sanral from pleading 55 cases against its members in court on the grounds that it had not followed court procedures and had delayed presenting its cases in court. These 55 cases represent nearly R2-million in outstanding e-tolls.

What this means is that Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely. The roads agency has issued several thousand summonses to collect outstanding e-tolls and has obtained default judgement against some who failed to put up a defence in court. Though Sanral has trumpeted these default judgments as precedent-setting victories, Outa says they are nothing of the sort. They merely mean the defendants failed to show up in court and argue the case.

Outa is defending roughly 150 summonses issued against its members, roughly a third of which it says have now been barred.

Sanral is attempting to recover about R11bn in outstanding e-tolls from Gauteng motorists. Some 3m motorists are reckoned to owe e-tolls, out of 3,5-4m registered motorists in the province.

As usual, Outa and Sanral have entirely different interpretations of the same facts. Says Vusi Mona, Sanral’s GM for communications: “There are no matters in which Sanral has been barred from pleading. There have been ongoing engagements with Outa’s attorneys for agreed timeframes for the exchange of pleadings and there are no operative bars against Sanral.”

Both Sanral and Outa had previously agreed to run a “test case” which would serve as a legal precedent, so as to avoid clogging the courts with thousands of cases. Last month, Outa pulled out of the test case process as this was taking too long to get to court, opting instead to lodge papers in the high court in Pretoria in defence of one of its members, Thandanani Truckers and Hauliers, which outlines its opposition to e-tolls.

“We were aware that while developing the complicated e-toll test case process, Sanral was issuing default judgments and declarations against the general public, in the belief they would be able to secure a precedent-setting case,” says Ben Theron, Outa’s chief operating officer. “One would have thought Sanral would have learnt by now that coercion and intimidation have not worked in the past and will not resolve the entity’s mounting debt.

“As far as Outa is concerned, Sanral’s journey of following an extensive litigation process to collect outstanding debt will take years to unfold and is a significant waste of the courts’ time and taxpayers’ money,” says Theron.

Another potential problem for Sanral is the issue of prescription in terms of the Prescription Act, which makes it difficult for creditors to recover debts older than three years.

Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this
E-tolls came into being in December 2013, so any outstanding e-tolls from December 2013 to May 2014 may have to be written off by Sanral. Outa chairman Wayne Duvenage reckons that more than R1bn of the outstanding e-tolls have now prescribed and are therefore unrecoverable by Sanral. And it’s getting worse every day.

Sanral’s Mona takes a different view: “To date, the issue of prescription has not been raised by any defendant in any matter where Sanral has sought payment of outstanding e-tolls. In any event, the failure to pay e-tolls is a criminal offence which is not subject to prescription.”

Sanral is relying on the Administrative Adjudication of Road Traffic Offences (Aarto) Act, which criminalises certain traffic-related offences in the Joburg and Pretoria metropolitan areas.
Wayne Duvenage
A legal expert specialising in prescription told Moneyweb that Sanral is treading on thin ground if it is relying on Aarto to recover its debts. “Sanral’s attempts to recover debts is a civil matter, and the Prescription Act applies. If I was defending clients summonsed by Sanral I would argue this vigorously and have any debt older than three years thrown out. I doubt any court is going to look at this as a criminal matter.

“Another point I would argue is that Sanral is potentially engaging in reckless lending in terms of the National Credit Act, since it is effectively issuing credit without doing the requisite credit assessment, despite the fact that Sanral says it is exempt from the NCA.”

Duvenage says the matter of prescription is likely to be contested by Sanral but any entity attempting to criminalise 3m defaulting motorists through the courts is playing with fire. Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this.”

Theron says despite warnings from civil society that the Gauteng e-toll scheme would collapse due to its cumbersome, costly and burdensome administrative processes, Sanral and the department of transport have decided to continue their litigious war against motorists.

Meanwhile, earlier this month, Sanral announced that it had cancelled all future bond auctions pending the outcome of a governmental task team inquiry into road funding. Sanral needs to borrow about R600m/month to cover its interest bill and operations, but the auctions have been poorly supported over the last year. Sanral says it has enough cash to last a few months. Institutional investors and rating agencies are increasingly concerned at the state of governance in state-owned companies, which means the government will be left to pick up the tab.

Source: MoneyWeb

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