Johannesburg - A second Putco fare price hike this year underlines the prevailing economic crunch that is making life unbearable for consumers.
At a time when fuel prices are spiralling out of control, Putco commuters are shocked by the operator’s decision to pass the expense on to them.
From July 1, the bus company will increase ticket prices by 3% for its Soweto and Eldorado Park commuters and 6% for Tshwane and former KwaNdebele, Mpumalanga, commuters.
The hikes are in addition to 8% increases that Putco implemented three months ago.
Commuters also face hikes in the taxi industry, while economists have warned of more fuel increases this year.
The overwhelmed consumers are still reeling from a value-added tax (VAT) hike implemented in April. The increase from 14% to 15% has sent most basic commodities and food prices soaring.
Joburg households are also struggling to come to terms with the added pain brought about by the massive hikes in property valuations.
Although values have dropped in some areas, valuations of more than 44% of properties in the city were increased by between 60% and 500%. Many residents, who are on a fixed monthly income, said they were being squeezed out of their homes and some businesses may be forced to shut down, resulting in job losses.
The Budget speech in February, delivered by then finance minister Malusi Gigaba, also increased the fuel levy by 52cents a litre. Fuel prices have also shot up several times since the Budget, including by 82c a litre at the beginning of this month.
Economists have predicted another fuel hike next month that may push the pump price to record levels.
“I don’t see fuel prices coming down in the next months. It’s bad for consumers, there’s no doubt about it,” economist Fanie Brink told The Star.
He said the depreciation of the rand against the dollar also did not augur well for the economy.
The local currency was about 2% softer against the dollar on Tuesday morning, edging closer to the R14 mark.
“It’s going to be terrible to get to work. Companies dependent on fuel want to cover their production costs and get some margins,” Brink said.
Taxi owners affiliated to the National Taxi Alliance discussed fare increases last month, spokesperson Theo Malele told The Star.
He said despite the fuel hikes, owners have been urged to feel for commuters. “We agreed that adjustments will not go above R2 (per trip),” said Malele.
“The message to our members was that they need to be considerate. We’re serving the poorest of the poor.”
The latest round of increments by Putco means its Tshwane and KwaNdebele passengers face a 14% increase to their fares this year.
Hikes for Soweto and Eldorado Park counterparts would also be at an above-inflation figure of 11%.
Commuters have reacted with shock to this and accused Putco of being unfair.
The Star is privy to a thread of email exchanges between Soweto and Eldorado Park commuters and the Larimar Group, which owns Putco.
Trevor Wickham, operations executive at Larimar, told the commuters that Putco was being forced by rocketing diesel prices to hike fares for the second time in a year.
“The additional 3% increase required is to offset the excessive fluctuation in diesel prices,” said Wickham.
He said fuel prices had effectively increased by more than 17% for the period March to June this year.
But commuters won’t have any of it, and have urged the company to reconsider the increase.
Kgomotso Nyakale decried the fact that Putco’s double-digit increases were above what workers got from their employers.
“You couldn’t give your employees that percentage, but you want it from commuters. There’s no company that gives its employees 11% increases,” said Nyakale.
Said Shumani Kwinda: “The market maximum salary increase in South Africa is 7%, if you are lucky.”
Nomvula Mkhondo told Putco to go back to the drawing board. “They should consider that we have cleaners and security (guards) using Putco buses. We all know that they don’t earn much.”
Mpumalanga passengers were planning protests against the increases. Putco transports an estimated 50000 people between KwaNdebele and Tshwane each day.
A commuter travelling from KwaMhlanga to Marabastad would have to pay R1172 for a monthly ticket.
Andrew Sefala, a Putco executive, said the company this year would face its heaviest loss in its history if it didn’t implement this round of fare increases.
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