Latest news with #R4-billion
Daily Maverick
4 days ago
- Business
- Daily Maverick
Mixed news at the pump: fuel levy rises while prices drop
The Western Cape High Court has dismissed the EFF's urgent bid to block a controversial fuel levy hike—just as fuel prices dip. From midnight, levies rise by 16c (petrol) and 15c (diesel), despite constitutional questions. It's a pump paradox: taxpayers pay more, but pump prices briefly fall. In a ruling handed down yesterday, Judge Nathan Erasmus found that the EFF's application lacked urgency and did not meet the legal threshold for interim relief. The court did not engage with the broader constitutional challenge itself, which the EFF had previously framed in its initial filing as a possible Part B of its legal strategy. A tax fight rooted in Budget 3.0 The levy increase was announced in Finance Minister Enoch Godongwana's revised Budget 3.0, tabled in May following the political fallout and eventual withdrawal of VAT hikes in earlier budget versions. Treasury estimates the fuel levy will raise about R4-billion in the 2025/26 fiscal year. The EFF has argued that the use of Section 48(1) of the Customs and Excise Act to implement the fuel levy increase amounts to an unconstitutional bypassing of Parliament. Section 77 of the Constitution requires that all new taxes be passed via a money Bill through the National Assembly. Arguments on constitutional compliance Representing the EFF, Advocate Mfesane Ka-Siboto told the court: 'The fact that this has happened before does not make it lawful. Past practice is not a substitute for constitutional compliance.' He described the move as a case of 'taxation without representation.' The Treasury, represented by Advocate Kameel Premhid, countered that Section 48(1) had long been used lawfully to adjust fuel levy schedules. He argued the measure was an administrative amendment within an existing framework, not the introduction of a new tax requiring legislative approval. What this means for you For consumers, the fuel levy increase translates into higher petrol and diesel prices at the pump, effective immediately. This could lead to broader knock-on effects on transport costs, food prices and inflation, particularly for lower-income households who spend a greater share of their income on fuel-linked expenses. Treasury maintains the hike is necessary to address fiscal gaps left by the abandoned VAT proposal. The fuel levy increase will be offset by a decrease in fuel prices – which also kicks in on Wednesday, 4 June. The Department of Minerals and Petroleum Resources (DMPR) announced the following price decreases yesterday: Petrol 93 (ULP & LRP): ⬇️5cents/litre. Petrol 95 (ULP & LRP): ⬇️5 cents/litre. Diesel (0.05% sulphur): ⬇️ 36.9 cents/litre. Diesel (0.005% sulphur): ⬇️36.9 cents/litre. Commenting on the changes, the DMPR noted that over the last month, there has been a decrease in the average Brent Crude oil price from US$66.40 to US$63.95, largely on the back of continued global trade uncertainty, Parliament distances itself from the damage Parliament, which was cited in the court papers, but not the target of any relief, issued a brief statement after the judgment: 'Although cited in the application, no relief was sought against Parliament. Parliament's position throughout the proceedings was to abide by the outcome of the court process. Accordingly, Parliament will comply with the court's ruling.' Oversight loophole or legal mechanism? In its legal representations, Treasury has argued that Section 48(6) of the Act ensures Parliamentary oversight by requiring the amended tariff to be tabled after the fact. The EFF, however, contends this form of post-implementation tabling falls short of the constitutional threshold for public finance legislation. EFF's Part B remains unclear In a short statement on X after the ruling, the EFF said: 'We are committed to fighting the fuel levy increase in court and in Parliament.' However, the party did not explicitly confirm that it would pursue the Part B constitutional review. Whether the EFF returns to court or not, the broader legal and political debate over fiscal authority, oversight and the democratic control of taxation is likely to persist. DM
eNCA
15-05-2025
- Business
- eNCA
No threat of City Power debt cutoffs by Eskom
JOHANNESBURG - City Power has moved to remove confusion about the threat of cut-offs by Eskom over the municipal entity's more than R4-billion debt to the national supplier. Some reports had suggested this may be the route Eskom will take as the government entities dispute the amounts owed to each other. But the Johannesburg metro's electricity provider says mediation by the Electricity Minister is helping resolve the impasse. "There is no issue between City Power and Eskom, we are working together," said City Power spokesperson Isaac Mangena.
Daily Maverick
23-04-2025
- Business
- Daily Maverick
Pick n Pay pushes for a financial comeback by backing the Boks and partnering with FNB
In a few months, Pick n Pay's logo will sit on the back of the Springbok jersey – a bold move from the retailer that reported mounting financial losses in 2024. On Thursday, 27 March, SA Rugby announced that Pick n Pay would become a Tier 1 sponsor of the Springboks, placing its logo squarely on the back of the country's most iconic jersey. Just a year before, the retailer had reported a full-year trading loss of R1.5-billion. Its most recent interim results showed a 9.1% increase in trading losses year-on-year. To stem the bleeding, the group proposed a R4-billion recapitalisation plan, complete with a rights offer and plans to list its stronger-performing Boxer brand on the JSE to keep the ship afloat. It has been reported by News24, and Planet Rugby that the estimated cost of the Springbok sponsorship is worth R70-billion. Neither Pick n Pay or SA Rugby has confirmed this figure. Allies in the aisle Pick n Pay's Springbok debut follows hot on the heels of a newly inked partnership with First National Bank (FNB), which includes Smart Shopper-linked eBuck benefits and discounted groceries for qualifying cardholders. 'Amid rising household pressures, this strategic partnership helps us deliver even more value to South Africans while attracting new customers,' Pick n Pay said. FNB was also announced as the new front-of-jersey sponsor for the Springboks, replacing MTN after an eight-year stint. That sponsorship has been reported to be about R150-million by EWN and News24, although FNB declined to confirm the amount. Together the two companies, already deeply intertwined through their retail partnership, are now investing a reported estimate of R220-million into South African rugby. Separate deals, same team sheet Despite the overlap, FNB said the Bok sponsorship was independently negotiated. Pick n Pay also confirmed that the overlap was 'unplanned'. 'The strategic partnership between FNB and Pick n Pay was a standalone business decision and was not influenced by either party's involvement with SA Rugby,' Faye Mfikwe, chief marketing officer of FNB, said. Pieter Woodhatch, CEO of FNB's eBucks, echoed this, saying the bank had confidence in Pick n Pay's recovery strategy. 'Our partners are chosen strategically to drive mutually beneficial behaviours,' he said. 'We are proud to partner with an iconic brand like Pick n Pay.' The numbers suggest early success. Burger Friday specials (R50 for four burger patties, a lettuce mix, two tomatoes, four buns and cheese slices) and 99c bread loaves have attracted foot traffic. FNB told Daily Maverick that they've seen a 'positive uptake' in Pick n Pay's environment since the launch of the rewards programme. Exit stage left for MTN MTN attributed its departure from the Springbok sponsorship to a 'refreshed brand positioning' and a shift in strategy. 'This evolution is not a reflection of financial or economic pressures, but rather a considered, forward-looking approach,' the company said. MTN declined to confirm the total cost of its previous Springbok sponsorship, which spanned a number of World Cup wins and brand visibility at an all-time high. The bleeding balance sheet Pick n Pay's 2024 audited results painted a grim financial picture. The company reported a R3.2-billion after-tax loss, R6.1-billion in net debt and a R2.8-billion impairment on store assets. The retailer started pursuing a two-phase capital raise of up to R12-billion. This strategy hinges on shareholder support, Boxer's performance and stabilising operations in a constrained economy. While the company says its recapitalisation has 'significantly strengthened' its balance sheet, the outlook remains cautious. How does this affect you? For consumers, the Pick n Pay-FNB alliance appears to be paying off. Essentials like bread and burger kits are cheaper, while cashback benefits soften the blow of rising prices. But for Pick n Pay shareholders and employees, the financial risks are harder to overlook. The company is still in recovery mode and the Springboks sponsorship, though high profile, adds pressure to prove value. 'Sentiment is being impacted by the current trading environment,' said Shireen Darmalingam, an economist at Standard Bank. 'While inflation remains largely contained and is expected to hover around the midpoint of the target range, uncertainty has risen. Tariffs, especially those imposed by the Trump administration, have pushed up break-even inflation and weakened brand confidence.' Darmalingam added that retail sales volumes for February 2025 undershot expectations, growing by just 3.9% year-on-year, down from 7% in January, while food and beverage sales declined. This adds complexity to Pick n Pay's equation. While sponsorship may increase brand visibility, the retailer still faces the hard task of executing a turnaround amid economic challenges. DM
