Tag: fees

By Loyiso Sidimba for IOL

The troubled SABC will square off with its rival MultiChoice at the communications regulator the Independent Communications Authority of South Africa (Icasa) over the requirement that the subscription broadcasting services carry three of its television channels for free.

The public broadcaster wants subscription broadcasting services such as MultiChoice and StarSat to no longer be allowed to carry its public broadcasting service channels, SABC1, SABC2 and SABC3, without entering into commercial agreements.

According to the SABC, its long-standing view has been that the current provisions of Icasa regulations, dictating that it should make its broadcasting content available at no cost and prescribing the public broadcaster to bear the costs of transmission to subscription broadcasting services, are ultra vires (beyond the powers).

The SABC has seven television channels authorised by Icasa – the “must carry” SABC1, SABC2 and SABC3 as well as SABC Encore, SABC News, SABC Parliament and SABC Sport – and fears that the authority’s draft regulations extend the ambit of the “must carry” concept to all the free-to-air public broadcasting service programmes comprising in a public broadcasting service channel.

”This would extend the SABC’s ’must carry’ obligations to SABC Sport, SABC Education and any other current channel or future channel to be developed,” the public broadcaster warned Icasa.

In its submission to Icasa dated May 21, the SABC insisted that the “must carry” channels are SABC1, SABC2 and SABC3 and do not include SABC Sport, SABC Education or any other SABC television channel either existing or to be developed.

The public broadcaster may, in its discretion, add the carriage of these additional channels, subject to commercial negotiations.

However, MultiChoice is opposed to the plan and has suggested that the move might be illegal despite the SABC obtaining legal opinion supporting its stance.

The SABC has been accused by MutliChoice of putting first its commercial interests that have now become more urgent in light of its continuing financial difficulties, which have nothing to do with its public service mandate of ensuring universal access to broadcasting services.

MultiChoice revealed that the SABC already earns R569 million a year in advertising revenue from the three channels carried on its DStv platforms.

”Contrary to the unsubstantiated allegations made by the SABC, no subscription or advertising revenue flows to MultiChoice as a result of the carriage of the ’must carry’ channels,” the company explained.

MultiChoice also charged that the public broadcaster failed to acknowledge that the company already makes a significant contribution towards the sustenance of public broadcasting by carrying all ’must carry’ transmission costs, incurring over R108m between 2008 and last year to comply with its obligations, and that Icasa has failed to recognise this.

”There is no legal basis for the SABC’s ’must carry/must pay’ proposal. Any suggestion that subscription broadcasters must pay the SABC for the ’must carry’ channels is completely at odds with the Electronic Communications Act 2005,” MultiChoice told Icasa.

The company insisted that subscription broadcasters cannot lawfully be required to provide the ’must carry’ channels to non-subscribers as such an obligation would not be legally permissible and is likely to be struck down as ultra vires and invalid on other grounds.

Free-to air e.tv wants Icasa’s must carry regulations not to be limited to public service broadcasting licensees such as SABC1, SABC2 and SABC3 but to be extended to other commercial free-to air broadcasters with public service obligations like it.

The SOS Support Public Broadcasting Coalition and Media Monitoring Africa (MMA) have backed the public broadcaster.

”In broad terms, the draft regulations are supportive of our position on ’must carry’, which can be summarised as: Must carry, must pay,” the civil society and not-for-profit organisations stated, adding that Icasa has allowed a ‘must carry, must not pay anything’ principle to exist.

Icasa will hear oral submissions from e.tv, MMA/SOS, the SABC and MultiChoice later this month.

 

Pain at the pumps after record increase

By Shamiela Fisher for EWN

The price of petrol goes up by a rand at midnight while diesel increases by between 63 and 65 cents a litre.

This record increase in the price of fuel will see them pay about R17 for a litre of petrol.

The mineral resources and energy ministry said it was due to crude oil prices, global petroleum product prices, the Rand/US Dollar exchange rate, as well as Fuel and Road Accident Fund Levies.

Eyewitness News spoke to a few motorists about the hikes.

“I’m definitely unhappy with the petrol hike. It’s obviously going to affect us in our homes,” said one motorist.

Another added that: “It’s affecting my pocket negatively as I need to travel to work.”

“This is one of my biggest expenses every month, so this would really negatively affect my financial situation,” said another motorist.

Meanwhile, trade union UASA said it was deeply concerned by the continuous fuel price increases.

In a statement on Tuesday, the union said: “[These increases leave the] workers in financial distress as they have to chip in more for their basic needs. The increase will be passed on to the consumer who will be forced to pay more for their basic needs.”

 

Steep petrol price increase on Wednesday

Source: Eyewitness News

The Energy Department has announced that the price of petrol will increase by 81 cents on Wednesday, 3 February.

Meanwhile, the price of diesel will rise by between 58 and 59 cents a litre and illuminating paraffin will cost 59 cents more a litre.

LPG will cost 193 cents more per kilogram.

Citing reasons for the prices increases, the Energy Department stated that the average international product prices for petrol, diesel and illuminating paraffin increased during the period under review.

“The rand depreciated against the US dollar during the period under review, on average, when compared to the previous period. The average rand/US dollar exchange rate for the period 31 December 2020 to 28 January 2021 was 15.0872 compared to 14.9391 during the previous period.”

 

Source: MyBroadband

Communications Minister Stella Ndabeni-Abrahams has doubled down on the government’s plan to charge people with computers, smartphones, and tablets TV licence fees.

This was part of a response from Ndabeni-Abrahams to a question from the DA deputy chief whip in the National Assembly, Michael Waters.

Waters asked the Minister of Communications and Digital Technologies:

What is the justification of (a) charging persons with mobile devices the cost of a TV licence and (b) transferring all the income of TV licences derived from mobile devices to the SABC?

In response, Ndabeni-Abrahams cited sections of the recently published “Draft White Paper on Audio and Audio-Visual Content Services Policy Framework: A New Vision for South Africa 2020”.

She said amendments to the TV licence fee section to broaden the definition and collection system for television licences are necessary because of the SABC’s financial challenges.

There are also plans to strengthen enforcement mechanisms and penalties of non-payment of TV licenses.

She added that “achievement of the above will be determined by the submissions expected from all South Africans towards the draft White Paper”.

What Ndabeni-Abrahams is referring to is the public comment process related to the Draft White Paper which closes on 15 February 2021.

Ndabeni-Abrahams’s response did not sit well with DA Shadow Minister of Communications Zakhele Mbhele.

Mbhele said Ndabeni-Abrahams did not “properly justify” government’s intention of charging people with mobile devices the cost of a TV licence and giving the money to the SABC.

“This draft paper proposes to exploit another stream of revenue to bail out yet another state entity brought to its knees by years of gross mismanagement,” he said.

“And it seems the Minister knows that this is not justifiable, given her poor attempt at answering the question.”

Mbhele added that it is the same White Paper that seeks to extend TV licence fees to include streaming services like Netflix, regardless of whether such a service is viewed on a television.

He urged the public to make written submissions opposing the Draft White Paper’s plan broaden the definition and collection system for TV licences.

The DA has also launched a petition against the government’s plan to force people to pay for a TV licence to stream Netflix or watch DStv.

“You should not have to pay a cent more to keep the SABC afloat,” the DA said.

Only 30% of people pay TV licence fees

By Sihle Mlambo for IOL

The SABC would be commercially viable and would receive an immediate cash injection of up to R2bn per year if everyone paid their TV licence fee.

This is according to the public broadcaster’s chief operations officer Ian Plaatjes, who was speaking to IOL in a wide ranging interview on Friday.

Plaatjes said only 30% of TV licence holders were compliant and that had substantially affected the public broadcaster’s funding model.

“Our TV Licence is R265 per year and we have 30% of people paying, so we have a default rate of 70%.

“As you know the organisation’s funding model is through TV licence fees as well as advertising revenue, so we are not government funded, we are very dependent on that.

“If everybody was paying their TV licence, we certainly would be a financially stable and viable organisation, but that isn’t the case,” said Plaatjes.

The public broadcaster also lost a lot of money in advertising revenue during the peak Covid-19 and has only started to show promising signs recently.

He said advertising revenue plunged between 70% to 80% during hard lockdown months.

Plaatjes said the organisation was entering into a Section 189 retrenchment process which would see 400 jobs on the line as part of the SABC’s bid to save about R700m per year for the next three years.

Management at the SABC have also said they will freeze salary increments for the next three years, abandon the company’s leave encashment policy and have also reviewed annual leave and sick leave policies.

Plaatjes also said the public broadcaster would be making a push to utilise DSTV as a TV licence revenue collection stream, while also clarifying that they will not be doing the same with international streaming services such as Netflix.

“We have said that we expect DSTV to collect television licence fees on our behalf, they have about 10 million subscribers and if those subscribers do not pay their fee, they can cut them off immediately.

“Some of those subscribers (on DSTV) do not have a TV licence, so we are saying they can collect those TV licence fees on our behalf,” said Plaatjes.

“(Unpaid TV licence fees account for) about R2bn per year, we would be financially stable and viable immediately, so, if you compare ourselves with the BBC (in the UK), which is completely funded through their TV licence, their fee is over R3000 per year and they have nearly 100% collection rate, so it makes a huge difference.

“All that money can be redirected to content and we can have fresher, newer content and also additional content as well,” said Plaatjes.

Meanwhile, he said the public broadcaster had developed a new target operating model which was geared at cashing in on digitisation of the sector.

On Monday, the Telkom streaming service went live with SABC content.

“With our new target operating model, we have identified additional revenue drivers, one of it being carriage licences, like the deal we have just concluded with Telkom which went live on Monday.

“What that does to our revenue is it gives us two additional revenue streams that we never had before, we get a licence (fee) for our channels and we will be able to share in the revenue on the Telkom platform.

“This is not an exclusive deal with Telkom, so we intend to do this deal with other telecommunication companies as well, and so, those will be other additional revenue.

“That is over and above what we have projected in turning the organisation around, so it is huge,” he said.

With the SABC still stuck on analogue, Plaatjes said it was critical to the SABC’s viability that the public broadcaster moved to digital in the next five years.

He said if the public broadcaster was able to offer direct-to-home (DTH) services with a set-top box, that would enable the SABC to have its own dedicated sports, health, education and channels aimed at the marginalised language groups.

Thriving SABC

Asked what a thriving SABC looked like in the next five years, Plaatjes said: “In a best case scenario, we will be in a multi-platform and multi-channel environment.

“Right now we are on analogue, we need to migrate to a digital platform. There’s currently two platforms available, DTT (digital terrestrial television) and DTH.

“The current legislation forces us to a DTT platform, but in five years time that cannot be the case because it is unsustainable in terms of the cost of it being too high.

“In five years time we will have more people on DTH, which is completely interoperable because you can be anywhere in the country and you will be able to be connected via DTH if you have a set-top box.

“But if I have a DTT box, and I move into an area which does not have DTT coverage, it is not interoperable, I have to buy a new box.

“We cannot grow our channels right now because we are on analogue, but on digital, we can have multiple channels and grow the industry through that, and by then we will have our own OTT (over-the-top) platforms, we will have our own OTT platform in the next couple of years,” said Plaatjes.

Grim

As much as Plaatjes said the SABC was ready to go with digitisation, the matter was beyond them.

“The future of our destiny is not in our own hands. With digitisation, we are ready right now, but that requires a set-top box.

“But the roll-out of the set-top box is not determined by us, the manufacturing of it, the setting up of it, the installation and the managing of it afterwards, is outside of our control (it is with the preserve of the Department of Communications).

“So if that is not rolled out, then in five years time, worst case scenario, we will still not be off analogue,” he said.

He added: “There is no stumbling block from our side, all we need is a set-top box, because the infrastructure is there.

“There are 4.5 million households right now that do not have digital TV, so they are still on analogue.

“If you go provide them with a DTH set-top box right now, they will be able to connect.”

 

By Yolisa Tswanya for IOL

They said it could’ve been slashed even further, but consumers have for now accepted a 34% reduction in Vodacom’s data prices.

Yesterday, it became the first network giant to comply with the Competition Commission’s call to lower data prices.

Morné Grewe said he was happy a decision has finally been made: “It will make a difference for many people.

“Even though it’s by 34%, it is a step in the right direction.

“It will make a difference to people and they won’t be spending so much per month on data.”

Beronisha Cloete said she found Vodacom to have good coverage but high prices: “I have never had any real problems with them.

“It can be a little lower, but it is what it is and we accept it.”

Nomzamo Balangile said the price reduction would allow her to buy data more regularly.

“I don’t always buy data because it’s expensive, but now maybe I will be able to buy more times a month,” she added. “I am glad they are lowering the price.”

By Lameez Omarjee for Fin24

A flat rate for electricity could help foster a culture of payment among Soweto residents, a local councillor told Fin24.

Soweto ANC councillor Mpho Sesedinyane believes a proposal for a R150 monthly flat rate for electricity could be a starting point to address the country’s non-payment woes. The flat-rate proposal was the brainchild of the South African National Civic Organisation – a non-political organisation which advocates on behalf of communities in engagements with government and other service providers.

Soweto owes Eskom almost R20bn – almost half of the total local municipal debt owed to the electricity utility.

Eskom has started disconnecting power to thousands of Soweto households as a consequence.

The now famous couple from the KFC proposal viral video went on their first outing to the Sowetan Derby on Saturday. (Video supplied by KFC)

Sesedinyane said the culture of non-payment dates back to apartheid when residents were told not to pay for public services as an act of resistance.

“Our people were told not to pay for services, not to pay for electricity,” Sesedinyane said.

The ruling ANC had not come back to residents to communicate it was noble to pay for services, after taking over in 1994, he said. Some residents can afford to pay, but are stuck in the old “mentality” and are still resisting payment, he added.

“We need to bring them back and say, we have won the country now. It is us [the ANC] that are governing now, can we now start to contribute and pay Eskom,” Sesedinyane said. These views have previously been expressed by president Cyril Ramaphosa and his deputy, David Mabuza, among others.

Sesedinyane believes the introduction of a flat rate could be a starting point to create a culture of payment for services.

“We had to agree (with Sanco) to come up with this project. For Eskom to collect revenue, it is important to start somewhere,” he said. That starting point is a flat fee of R150 households should pay per month for electricity.

If a flat rate of R150 is introduced, Eskom would at least generate some kind of income, which is better than none at all, he suggested.

Sesedinyane explained that the majority of Soweto residents are unemployed, living below the poverty line and are reliant on social grants. This means they are unable to pay for electricity.

The flat rate should be set at an amount which everyone can afford, including grant beneficiaries. After three or four years the flat rate can be increased, and at that point people will be used to paying for electricity, he added.

“People will then be in a position to know it is noble to pay for services, especially electricity. And they will be used to paying at the end of the day.”

Sesedinyane said that prepaid meters will not be the solution. “Our people will start connecting themselves illegally and they will not pay for electricity.”

Not sustainable

The South African Local Government Association – an association comprised of 257 local governments – however does not think that a flat rate would work. Spokesperson Sivuyile Mbambato told Fin24 that the proposal was “unsustainable”.

“We do not have the luxury of cheap and excess electricity like we did more than 20 years ago. Everyone must pay for what they use,” he said.

Salga is supportive of a prepaid solution. “Prepaid will be the answer in Soweto and other townships but the residents still reject that. This is an indication of how deep is the culture on non-payment in our communities,” said Mbambato.

The association’s National Executive Committee met last week to discuss solutions for rising municipal debt, among other issues.

The NEC resolved that a two-phased approach be implemented to address rising debt, according to a statement issued by Salga last week.

Phase 1 puts forward stricter enforcement by municipalities on credit control measures. This means municipalities will have to target government properties and businesses, through disconnection if there is “sufficient merit” in line with their credit control policies, the statement read.

Phase 2 involves an analysis of debt to classify debt which must be written off, or is realistically collectable.

The proposal comes after a period in which Salga interacted with various parliamentary portfolio committees on matters relating to debt owed by municipalities.

South Africans are paying more for private healthcare than ever before. But forking over more cash for more — and often unnecessary — care, isn’t paying off for consumers, a five-year investigation by the Competition Commission shows.

The Competition Commission today released the final report on its health market inquiry in Johannesburg. The 256-page document is the outcome of half a decade of research by the body, which included public hearings, written submissions and meetings with key players in the private health industry. The report is also the most detailed picture of private healthcare in the country’s history, revealing new details on everything from ownership and profit patterns to how health facilities contract doctors.

The report echoes the inquiry’s previous 2018 findings that a lack of competition in the private healthcare industry is fuelling increasingly unaffordable healthcare costs. It’s also incentivising doctors and private health facilities to over-treat patients, sending them to hospital more frequently and for longer without any real medical benefit. This is particularly true in areas like Gauteng and the Western Cape where there are more hospitals and doctors.

And with power concentrated in the hands of just a few major hospital groups, there is little motivation for hospitals and doctors to try to bring down costs and hardly any room for transformation.

Former Health Minister Aaron Motsoaledi pushed for the inquiry ahead of its 2013 launch. Motsoaledi wanted to understand just why private healthcare was so expensive before the government began buying services from the sector under the National Health Insurance (NHI).

The Commission’s final recommendations have — in many ways — already begun shaping the country’s NHI transition.

Three hospital groups have 90% of the market

South Africa’s population has grown by almost three-million in the last decade, but the number of public hospital beds in the country has barely budged, the Commission found.

In the private sector, the number of hospital beds, however, has nearly doubled.

According to Statistics South Africa, fewer than 1 in 5 South Africans were members of medical aids in 2018.

Just three hospital groups — Netcare, LifeHealthcare and Mediclinic — account for 90% of the private hospital market, based on 2016 hospital bed numbers. Independently-owned facilities make up the remaining 10% of the market.

The high concentration of power in this sector, the Commission notes, makes it vulnerable to collusion, both formally through the creation of cartels and informally. This is because — in theory — it would be easy for a small number of players to engage in price fixing, setting the tone for the market.

Without much competition, the three major hospital groups “all but dictate year-on-year price and cost increases” for medical aids and administrators while reaping the benefits of over-treatment at their facilities.

The Competition Commission’s report attributes overtreatment to two factors: Monetary incentives for doctors and facilities to admit more patients and a phenomenon called supplier-induced demand. The concept is premised on the more supply you have of beds, doctors, medicine, the more people use them regardless of whether they need them or not.

In its 2018 report, the Commission analysed hospital claims and found that almost a third of claims costs couldn’t be explained by factors such as a patient’s age or disease. These mysterious charges were being passed onto consumers in the form of increased premiums, the Commission argued.

But hospital groups say that doctors also play a role in over-prescribing care. The Competition Commission inquiry, however, maintains that health facilities and doctors play complementary roles in the phenomena — something for which the body found evidence for when reviewing contracts between the two that encourage doctors to admit more patients.

The costs of this pricey hospital care are passed largely onto medical aids — and consumers, the Commission found.

The Competition Commission writes: “[Large hospital groups] facilitate and benefit from excessive utilisation of healthcare services, without the need to contain costs, and they continue to invest in new capacity beyond justifiable clinical need without being disciplined by competitive forces.”

And with great market power, the ability to set your own prices is almost a given.

“Hospital groups have the market power to threaten that the national price for all their hospitals would have to increase,” the report quotes Discovery Health as testifying, “if there was a threat that a hospital in their group might be excluded from a local network [of preferred providers].”

The Commission’s report also found that Netcare, LifeHealthcare and Mediclinic has unfair advantages that keeps them in the lead and prevents transformation in the sector, because the practises make it hard for new players to enter. For instance, the three were able to cross-subsidise facilities across their vast networks, meaning they were able to use profits from well-performing hospitals to make up for poorer earning ones. And, the Commission says, the “big three” were able to lure the best doctors to their wards with lucrative benefits smaller hospitals just can’t afford.

The Competition Commission was able to gain access to some contracts between specialists and health facilities, although the report does not reveal which facilities or doctors the agreements refer to. In some instances, the Commission found that specialists who agreed to admit their patients into certain private health facilities over others were offered preferential financing in terms of loan servicing rates and repayment rates to buy shares from larger hospital groups.

The report recommends that the Health Professions Council of South Africa investigates this practice.

The Commission also unearthed evidence that some private health facilities encourage doctors to admit higher volumes of patients, “making full or maximum use of the facilities” or ensure that they “treat a minimum proportion” of their patients in the facility. This includes setting targets for admissions and penalising specialists who contract with them if they didn’t meet these goals.

Meanwhile, hospital admissions rates have skyrocketed in the last 10 years among those with medical aid — the Competition Commission found this increase could not be attributed to the overall health of the population.

Black entrepreneurs may get licenses to open new hospitals, but can’t get the cash

Major hospital groups are pushing back against the contention that they have a firm hold on the market, in part arguing that many new hospital licenses have been granted to smaller entities.

The Commission has fired back, saying that although some would-be hospital owners — particularly black, coloured or Indian entrepreneurs — are able to secure licenses, they struggle to get financial backing. Those who can’t get this kind of capital are forced to sell their licenses to bigger hospital groups.

Commission proposes mandatory basic benefit for all medical scheme members

Why did the private healthcare sector get so out of whack? Well, it’s in part because major sections of the National Health Act, that allow the national health department to regulate the private healthcare sector, were never enforced, the Competition Commission says.

The national health department did manage to introduce a list of 270 largely hospital-based conditions and treatments — called prescribed minimum benefits — in 1998 that medical aids must legally cover. But the list is woefully out of date.

Work to redefine prescribed minimum benefits is already underway. In line with the inquiry’s previous recommendations, the health department is hoping to make it more comprehensive and allow it to cover day-to-day needs like contraception.

The Council for Medical Schemes is also busy designing a standard medical aid package that will one day be offered by all schemes, something the Commission proposed in its 2018 report. The offering will have to spell out exactly what it does and doesn’t cover and the Council for Medical Schemes will review it every two years.

With each of the country’s medical aids offering the same standard package, consumers will be better able to compare value for money between medical schemes. Medical schemes, in turn, will have to work harder to make care better and more affordable to woo new clients.

But today’s report adds a new twist: The Commission has proposed this standard package be mandatory for all medical aid members. Those who want expanded cover will then “top up” by buying additional cover. Gap cover, the body says, will become a thing of the past.

Does this sound familiar? This is a similar structure to what the NHI proposes: One mandatory basic package of care provided by the state with medical aids selling additional cover.

The Commission has also put forward sweeping changes to improve, for instance, the issuing of hospital licenses, the monitoring of possibly anti-competitive mergers and centralising health data from both private and public facilities to improve accountability. None of these, it cautions, should be implemented as standalone measures. Perhaps one of the investigation’s most important recommendations is the creation of a body that will one day reduce supplier-induced demand, or the private healthcare system’s tendency to provide more care in areas with d higher numbers of doctors and facilities.

The proposed independent “supply-side healthcare regulatory authority” would be independently funded by the government. The body would take over what are currently opaque provincial processes for issuing new licenses for healthcare facilities. It will also handle the issuing of practice numbers in consultation with the Office of Health Standards Compliance to help facilitate the contracting and payment of healthcare providers under the NHI.

The new authority would coordinate a forum to decide the price of services under the NHI. This may be a tall order when historic distrust remains between members of the public and private health sectors and when private healthcare members, the Commission notes, are loath to even discuss billing codes for fear of divulging sensitive information.

The United Kingdom’s National Health Services has a similar regulator.

“All healthcare purchasers, including the NHI, will require providers to be properly regulated in order to achieve affordable access to quality care,” the Commission warns. “Any single buyer system, like the NHI Fund, on its own, that is without complementary supply-side regulation, cannot succeed.”

Ministers at war over e-tolls

Minister of Finance Tito Mboweni took to Twitter on Thursday to oppose Gauteng premier David Makhura’s views that the e-toll system should be scrapped.

David Makhura said in a speech that “our position has not changed. We remain determined that e-tolls are not part of the future of our province.” He went as far as saying that the provincial government was prepared to pay some of the money owed by motorists to ensure the tolling system was scrapped.

Mboweni fired off a series of tweets saying that there should have been a plan at the introduction of e-tolls to ensure the system worked and yielded returns in the long term.

Mboweni incited public ire when he tweeted “I don’t know why the middle and upper classes in Gauteng want to complicate our lives. The working class do not pay e-tolls!! Public transport! Hello…”. Motorists and public transport users disagreed with the sentiment.

Transport Minister Fikile Mbalula waded in, saying President Cyril Ramaphosa instructed that a meeting be held to discuss a way forward, rather than debating the matter over Twitter.

By TJ Strydom for Business Live

Motorists will this week get their steepest increase at the pump in four years as the recent slide in the rand and higher global
oil prices are passed on and a hike in government levies takes effect.

The retail price for 95 octane petrol is set to rise R1.31 per litre inland on Wednesday and R1.26 on the coast, the Central Energy Fund (CEF) said on Saturday. Diesel prices will rise about 82c.

The increases will pile pressure on consumers who are reeling from a value-added tax increase in 2018 and face
another bout of electricity price hikes. Prices rise 14% for direct Eskom customers on Monday and for a similar amount for municipal customers on July 1.

Fuel price hikes usually have a second-round effect as wholesalers, retailers and other service providers gradually pass the increases on to their customers. And the hikes are notoriously “sticky” when it comes to inflation — taxi fares that rise when fuel becomes more expensive do not necessarily fall when prices at the pump
go down.

Petrol at R16.13 per litre is still cheaper than it was as recently as December, but the increase is the harshest since April 2015, according to data from the Automobile Association.

With weak economic growth and the turmoil at the SA Revenue Service contributing to an expected revenue shortfall of more than R42bn and personal and company taxes at their
limit, the Treasury has shifted increasingly to other avenues for taxation. Government-imposed levy adjustments account for 20c per litre of this week’s increases, with 15c going to the fuel levy and 5c to the Road Accident Fund. These increases were announced by finance minister Tito Mboweni in his budget in February. Roughly a third of the amount motorists are charged go to these coffers.

“With effect from 3 April 2019, the fuel levy in the price structure of petrol and diesel will amount to 352c per litre and 337c per litre respectively. The Road Accident Fund levy in the price structure of both petrol and diesel will amount to 198c per litre with effect from 03 April 2019,” the CEF said.

The fund said the weaker rand, which on average depreciated from R13.80 in the previous month to R14.39 in the latest month, and higher global oil prices were responsible for the rest of the hike. When the Bank announced its interest rate decision last week, the size of the increase was already easy to forecast using CEF data.

Though consumer price inflation is comfortably within the Bank’s target, it flagged global oil prices and the effect it will have on domestic fuel costs as one of the upside risks to its inflation outlook when it left the repo rate unchanged at 6.75%.

Fuel prices, along with higher food and electricity costs, were expected to lift inflation over the medium term, Bank governor Lesetja Kganyago said.

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