Gasoline price hikes and other increases will hit South Africa starting this week

South Africans face a financial double whammy this month as record fuel prices and electricity tariff hikes take effect.

Customers who buy electricity directly from Eskom will see a 9.61% increase from April. The tariff increase for municipal customers comes into effect in July and is expected to be the same as or slightly higher than the Eskom increase as many municipalities charge a premium for additional costs.

Eskom had previously proposed its 20.5% tariff increase for 2022/23, arguing that most of the cost increase was due to two factors beyond its control: the requirement to increase purchases of energy from independent generators and the increase in CO2 taxes.

The group has also indicated that it plans to ask for a further 15.07% increase in 2024 and a 10% increase in 2025. However, that depends on the actual increase Nersa grants Eskom this year, with the regulator rarely granting the utility the full requested increase.

On March 5, 2021, Nersa approved a 15.06% increase for Eskom’s direct customers, which was subsequently implemented on April 1, 2021. A 17.80% increase for municipalities was implemented on July 1, 2021.

Beyond the requested wage increase, Eskom said it still relies on further equity support from the government to sustain the company’s continued existence.

gas prices

South Africans can also expect another record price for petrol and diesel in April after Russia’s invasion of Ukraine sent global oil prices skyrocketing.

Motorists were already paying R1.46/litre more for petrol in March, with a risk of a similar increase in April.

The latest data from the Central Energy Fund shows that the price of gasoline is expected to rise by 1.73 to 1.81 R/liter in April. The diesel price is expected to increase by 2.97 to 3.12 R/litre.

However, this should compensate for something an emergency intervention announced Finance Minister Enoch Godongwana on Thursday (March 31).

Godongwana said it would do so by temporarily reducing the general fuel levy (GFL) included in the base fuel price by R1.50/liter for the period between April 16 and May 31, 2022.

These changes are reflected in diesel and fuel costs as follows:

  • A reduction in GFL in petrol from R3.85/litre to R2.35/litre
  • A reduction in GFL in diesel from R3.70/litre to R2.20/litre

It is not yet clear when this reduction will take place as fuel prices in South Africa are usually adjusted at the beginning of the month rather than the planned start date, the 16th.

Additional costs

As it is the start of the financial year for many companies in South Africa, other price increases usually take effect in April.

Multichoice have announced a weighted adjustment of 2.7% for all DStv packages, with the price of DStv Premium now increasing by R10 to R839 per month.

Both MTN and Vodacom have also announced price increases effective April 1st.

Vodacom said it capped the increases at 5.3% and the increases would only apply to subscription fees. Installment payments on devices are not affected by the increase.

MTN said an inflationary environment has significantly contributed to increased input costs, forcing it to respond to continued market pressures and increase contract prices.

“We have tried to keep the price increases to a minimum in order to offer our customers high-quality telecommunications services at the lowest possible cost,” said Mapula Bodibe, Chief Consumer Officer of MTN SA.

“Tariffs will be an average increase of 5%, which is in line with inflation and comparable to the market.”

Read: Emergency Gasoline Price Intervention Announced for South Africa