THREE INCREMENTS CONSUMERS SHOULD EXPECT

MBABANE – There is no ‘catching a breath’ for the consumer as household products are increasing this year.

A glance into the costs that are being effected this year has shown that within two months into the year, consumers could be digging deeper into their pockets for the same products and services for the rest of the year. This is because there are at least three increments to look out for. These are fuel, electricity tariffs and customs duty increments.

In turn, these also cause increases in other products such as transportation, housing, and food. If anything can go by with these increments, to start with, the hiked prices of fuel show that they do not only affect motorists, but could fall on the shoulders of pedestrians. Also coupled with the 13.5 per cent salary increment for public transport workers, fuel prices may lead to the review of public transport fees anytime this year.

Already adjusted this month, motorists are now paying an extra E1.10 for both unleaded petrol (ULP) and diesel (50 ppm) and 50 cents per litre for illuminating paraffin. As of March 8, ULP increased from E20.50 per litre to E21.60 per litre. Diesel 50ppm increased from E21.80 to E22.90 per litre. Illuminating paraffin increased from E16.75 to E17.25. Fuel increments are an invitation to public transport increases. The Minister of Labour and Social Security, Phila Buthelezi, issued a gazette detailing the minimum wage for the road transportation industry on Thursday.

Necessitated

Anticipated talks between government and public transport owners could be necessitated by how fuel prices have performed. Therefore, public transport fees are anticipated as transport operators are paid by transport owners, who, in turn, are in the business to make profit. It is worth noting that just when some parents are still recovering from paying school fees, transport costs may accrue.

More other costs, including prices of mealie meal, rice, cooking oil, body lotion, might be reviewed and something to also look forward to. In the past three instances, consumers have enjoyed a decrease in fuel prices. There were no fuel adjustments in February when parents raised school fees. On January 5, this year, ULP decreased by 30 cents from E20.80 to E20.50 per litre, while diesel and paraffin decreased by 80 cents per litre.

Diesel went down from E22.60 to E21.80. Paraffin decreased from E17.55 to E16.75 per litre. On December 6, last year, the price of petrol remained unchanged at ULP 95, price maintained at E20.80/litre. Diesel and paraffin prices both decreased by 80 cents, coming down from E23.40 to E22.60 per litre for diesel, while paraffin dropped from E18.05 to E17.55.

On November 3, 2023, ULP 95 decreased by E2.00 per litre from E22.80, diesel 50ppm from E24.40, and illuminating paraffin decreased from E19.05 to E1 per litre. The fuel price adjustments are attributed to the fluctuating exchange rate and the changing global oil prices. In March, the Rand/Lilangeni weakened and global oil prices increased, leading to under-recoveries.

The government has urged the public to use fuel efficiently as the international oil markets and the Lilangeni to Dollar exchange rate remain highly volatile. Moreover, while still braising, consumers are facing rolling electricity tariff increments. The Eswatini Energy Regulatory Authority (ESERA) gave the green light for the electricity tariff increase effected by the Eswatini Electricity Company (EEC).

Effecting

On April 1, the EEC will again be effecting an 8.02 per cent tariff increment for the 2024–25 financial year, a press statement informing all customers said. This follows the tariff increase of 10.14 per cent for the 2023–24 financial year. With this tariff increment, a unit (expressed in kWh) costs E2.25. For a domestic customer, this means that E100 buys 44.4 units. Buying electricity for E50 will mean that you have 22.2kWh, while E30 forks out 13.3kWh and E10 gives you just 4.4 units.

With an 8.02 per cent increment on April 1, the unit price will be E2.43. Then E100 will be worth 41 units.
There were freezes that were introduced by ESERA in 2019 and 2020 due to the COVID-19 pandemic after 5.7 per cent was sought by the EEC. In the 2021/22 financial year, domestic electricity consumers heaved a sigh of relief, with 1.33 per cent and 1.27 per cent affected in the 2022/2023 financial year. This was despite the EEC filing an application to have the tariffs increase by an average of 7.16 per cent.

There are also customs duty increments under the Southern African Customs Union (SACU), which are distributed annually among members. This is in lieu of excise duty and levies. SACU members are Eswatini, Botswana, Lesotho, Namibia and South Africa. The excise duties and levies are imposed mostly on high-volume daily consumable products.Some goods, including alcohol and tobacco, are subject to three per cent for domestically produced and seven per cent for imported alcohol or tobacco levies.

Addition

Levies are also an addition to other taxes, like VAT. Other products on excise include petroleum, non-essential or luxury items such as electronic equipment, and cosmetics. The function of the duties and levies is to ensure a constant stream of revenue for SACU members while discouraging consumption of certain harmful products.
The SACU agreement means that the excise tax rates are the same in all five SACU member states and they have since been reviewed.

These rates were reviewed when the minister of finance in South Africa delivered the budget speech and they affected all five countries, meaning that the increase in South Africa is an increase here. Levies are consumption taxes, meaning that they are paid by the end consumer even though it is the producer or importer who remits them to the Eswatini Revenue Service (ERS).

Depending on whether products are imported or not or come within the SACU membership, there could be increments too. These goods may include bread. The bread price was last increased by 20.73 percent on July 13, 2022. Other than bread, there are still other household products.A 10kg mealie meal costs about E120, rice between E130 to E150, while chicken portions range between E180 to E260. There is also the issue of rent.

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