Vehicle-tracking company Altech Netstar is taking dramatic cost-cutting measures amid soaring fuel prices.

Among other steps, the JSE-listed subsidiary of Altech plans to shift some of the cost burden to its clients, whose 500000 vehicles carry Netstar’s tracking device.

“Our monthly subscription will increase by R4,” international and business development director Harry Louw said yesterday.

Netstar, which has 65 ground crews and 11 helicopters and fixed-wing aircraft for the recovery of stolen vehicles, spends heavily on petrol, diesel and jet fuel. “The costs associated with our sophisticated and detailed recovery teams are extensive, and a very large portion of these costs are directly linked to the price of fuel,” Louw said.

Brent crude oil has skyrocketed from an average $28 a barrel in 2003 to an average $115 a barrel this year.

Over the same period, the crude-oil spike has boosted the average petrol price from about R3,83/l to R8,71/l and diesel from R3,26/l to R9,29/l , the South African Petroleum Industry Association says.

Isaac Matshego, economist at Investment Solutions, said the spike in global crude oil and the weak rand had been driving petrol and jet-fuel prices.

In a letter to customers, Netstar said the total increase would be R6 a month, effective from next month.

“This equates to a R4 increase based on the increased cost of fuel, and an additional R2 increase to subscribers who have rental agreements, based on the increased interest rate,” Louw said.

The latest increase in the subscription rate is the second in a year that is part of “a variety of cost-cutting measures to weather this temporary downturn”, he said.

In March, Netstar raised rates 2%-8% depending on the product and tariff package .

Tracker, another vehicle- tracking company , looks set to follow in Netstar’s footsteps.

“We increase our rates annually in October and, for the past several years, these increases have been below the annual rate of inflation,” said Gareth Crocker, spokesman for Tracker, whose tracking device is installed in about 550000 vehicles.

Crocker said fuel costs were beginning to bite. “While it will always be significant in a contract-driven business, we have not experienced a disproportionate increase in the number of people cancelling their Tracker contracts.”

Netstar said: “We have experienced a small increase in subscriber churn, which we ascribe to the difficult economic conditions.”

Matrix, a car tracker with 145000 subscribers, had also seen an increase in the number of clients who were “struggling with subscription payment”.

But Matrix had bucked the rate-increase trend.

“The company hasn’t increased rates in the past three years. We are not going to increase this year either,” senior marketing manager Hernus Vermeulen said. “Thus far we have managed to contain our costs.”

T he company did not bear the full brunt of fuel costs. “The recovery team is outsourced.”

Even so, vehicle trackers are worried about the shaky economy as “a lot of clients are feeling the pinch”, Vermeulen said.