Johannesburg - Brace yourselves for tough times. The petrol price is increasing again on Wednesday, Vodacom is raising its subscription fees, and municipal rates and services will also be going up.
Stanlib senior chief economist Kevin Lings said the price hikes for petrol and electricity and the recent increase in taxes would put consumers under more pressure.
He said consumers would have to be more disciplined with their spending. “They have to be careful how they spend on luxuries,” Lings warned.
Steep increases in water, sewerage and electricity costs in Joburg are also expected from July 1.
The city is proposing tariff increases of 12.19 percent for electricity, between 11 percent and 17 percent for water, 6 percent for rates, 15 percent for sewerage and 8 percent for refuse removal.
The tariffs are expected to be approved at a council meeting on Wednesday.
The increases in water and sanitation come with a rider that input costs from Rand Water still need to be confirmed.
The electricity tariff is no longer stepped, meaning that everyone will be paying a 12.19 percent increase regardless of how much they use.
Added to this is the new time-of-use tariff City Power will be introducing from July 1, which penalises people who use electricity on weekdays between 7am and 10am, and between 6pm and 9pm.
“The consumers are in for a difficult phase,” Lings said.
He said a big concern was the electricity price, which has been going up rapidly.
“Water will certainly be above 10 percent. Unfortunately, consumers can’t avoid these items such as sanitation, petrol, electricity and water. This is a huge concern, but consumers have to spend money on petrol, water and electricity. It’s unlike when the prices of cars are going to increase, you can simply avoid buying a car,” Lings said.
However, the petrol price had to be dealt with separately, he pointed out.
“The petrol price came down. It’s still lower than what it was a year ago.
“In April last year, petrol was R14.39 a litre; when it goes up this time, it will be R12.89. The consumer is still better off. It will hurt in the first two months, but they will get used to it,” Lings said.
He added that the Reserve Bank announced last week that the inflation rate would be above the inflation target by the end of this year. “For consumers who also have debts, it’s going to hurt,” he said.
Nedbank economic analyst Dennis Dykes attributed the petrol price increase to a weaker rand.
He said that if the rand was weak, it automatically affected the petrol price, as well as food prices.
Dykes noted that tomorrow’s price increase “takes the petrol price back to where it was in November last year”.
The price of 95-octane petrol in Gauteng will rise by R1.62 a litre tomorrow, with the 93-octane increase R1.56/litre.
The wholesale price of diesel in Gauteng is set to rise by between R1.22 and R1.24/litre. Illuminating paraffin will go up by 26c/litre countrywide.
In his Budget speech on February 25, Finance Minister Nhlanhla Nene announced that the fuel and Road Accident Fund levies on petrol and diesel would increase today by 30.5c and 50c/litre respectively.
Vodacom has announced increases in subscription fees for selected contract price plans effective on May 1.
Unions said municipal rates would rip holes in the pockets of millions of people.
SA Democratic Teachers Union spokeswoman Nomusa Cembi said: “Our members won’t cope. There is currently an impasse in the salary negotiations between us and the department. We are asking for a 10 percent increase for our members, but the government has offered us only 5.8 percent. How are the teachers expected to cope with all these expenses? This is going to be tough times for our members,” she said.
Cosatu spokesman Patrick Craven said: “So many things are going up all at once. This is going to have a huge effect on millions of people.”
The Star