Consumers pushed to knife's edge

Cape Town - As things stand at the moment, consumers are on the knife’s edge, Neil Roets, CEO of Debt Rescue told Fin24 on Tuesday.

"If the decision by Nersa was to grant Eskom's request for a 25% rate increase, it would have added to the financial strains of consumers, especially in light of all the other price increases, like the petrol price increase, the increase in municipal rates and the increase in interest rates that will most probably take place later this year," said Roets.

"These price increases filter through to the prices of other goods and services, which makes the situation even worse."

Consumers will be hit hard on Wednesday as various price increases come into effect, adding to the already heavy burden they have to bear.

The petrol price will go up by more than 40c per litre on Wednesday. Petrol will cost R13.34 per litre at the coast and R13.77/litre in Gauteng if you're using 95 octane, for instance.

READ:Over 40c hike in petrol price

Commuters in the Western Cape will have to dig deeper into their pockets for a train ride from Wednesday with fare increases for single tickets from 50 cents to R1, weeklies from R1 to R2 and monthlies from R2 to R38, depending on travel zone and class.

READ: Train price hike or more rail pain, warns Metrorail

Cosatu in the Western Cape has indicated that the recent fare increases announced by Metro Rail in respect of the train tickets are unfair and will be opposed by the union.

A flicker of relief for consumers could be seen as the decision by the National Energy Regulator of SA (Nersa) to refuse Eskom’s application for a further increase in tariff, over that already approved.  

READ: 5 reasons why Nersa turned Eskom down

According to the City of Cape Town's executive deputy mayor Ian Neilson, the decision by Nersa means that the tariff increases for the City’s own electricity customers of 10.82% will be implemented on July 1 2015, based on the 14.24% increase of Eskom’s bulk tariffs to municipalities, as previously approved by Nersa.

Neilson said the City of Cape Town welcomes the decision by Nersa to refuse Eskom’s application for a further increase in tariff, over that already approved.

Meanwhile, in Gauteng the new toll tariffs and monthly caps for registered users come into effect on Thursday July 2.

This is the first part of the new toll dispensation announced by Deputy President Cyril Ramaphosa in May.

According to Sanral's head of communications Vusi Mona, account holders are the first to benefit from the new dispensation with reduced tariffs per kilometre and monthly caps on all classes of vehicles.

READ: Don't be fooled about new e-toll dispensation - Sanral

For instance, for light vehicles the monthly cap will now be R225 for Sanral account holders – down by 50% from the R450 per month that has been levied up until now.

"The introduction of the lowered standard tariff that is now the same as the e-tag tariff will provide relief to users who are not registered," Mona said on Tuesday.  

While the decision by Nersa was not to grant Eskom's request, that is not the end of the story, cautioned Roets, because Eskom has been given another opportunity to reapply for an increase.

"We can just hope that Nersa sticks to its decision," he said.

At the same time he pointed out that the Greek crisis is also likely to have an effect  on consumers.

"If Greece decides to leave the European Union, that could have a negative impact on the rand, making imports more expensive," explained Roets.

He said consumers who find themselves in a situation where they are over-indebted, should, however, not lose hope.

"Debt counselling was introduced by the National Credit Act to assist over-indebted consumers to pay off their debt in an affordable manner without losing their assets. The system is continuously improving and has helped thousands of consumers who have been struggling because of the difficult financial climate," said Roets.

ALSO READ: Many still drown in debt

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders