KICK IN: Hikes in fuel price, levies and tolls
Debt Rescue is gearing up for one of the busiest periods in its history – CEO.
Consumers, already up to their necks in debt, are in for another shock over the next few months. Petrol has risen 74c a litre, while diesel has spiked 91 to 93c a litre.
Economists ascribe the fuel price increase largely to the weaker rand and rise in crude oil price – a number of taxes and levies are also about to kick in.
Dawie Roodt, chief economist of the Efficient Group, said consumers are also about to be hit by higher toll fees, new taxes and hikes in three existing taxes between March and June.
“The rise in tolls by Sanral on top of the fuel price hike is going to affect all South Africans thanks to the fact that most freight is now transported by road because of the total collapse of the freight rail network under the stewardship of a corrupt and bankrupt Prasa (Passenger Rail Agency of South Africa) ,” Roodt said.
The increase in the General Fuel and Road Accident Fund levies, which will apply next month, is going to add to consumers’ pain significantly, Roodt said.
Neil Roets, CEO of Debt Rescue, said the introduction of the carbon tax on 1 April along with the refusal by the National Treasury not to move the country’s tax brackets in line with inflation, means that most taxpayers will end up paying more in taxes, meaning less cash to spend on essentials like food and clothing.
The General Fuel Levy will increase by five cents a litre, and the Road Accident Fund Levy will increase by 15 cents a litre.
Roets said it is highly likely that more motorists would skip paying toll fees because they’ll have less money to spend.
With more than a quarter of South Africa’s workforce unemployed – and little or no hope existing that this will change anytime soon, Roets said they were gearing up for one of the busiest periods in the history of Debt Rescue.
Roets said the one spark of light in very dark horizon was the comment by auditing firm PWC that warnings issued by debt experts had somewhat curbed consumer spending.
“The reality is that now South Africans have been reduced to buying food on credit and while there is still substantial expenditure on luxuries, a growing number of deeply indebted consumers are being pushed are being pushed into a corner where debt counselling is their only solution.”
He said almost half of all consumers were three months or more behind in their payments. The mayor culprits are credit and store cords followed closely by unsecured debt.
The only measure of relief for consumers in over their head in debt is the legally binding system of Debt Review, which allows deeply indebted consumers to repay debts over a longer period In smaller installments, often at a discount.