The record drop in the price of all grades of fuel and diesel will give deeply indebted consumers an opportunity to reduce their debt load and start saving for a rainy day.
The largest petrol price drop yet – scheduled for today (Wednesday) – will see 95 octane petrol drop by R1.23 a litre while 93 octane will decrease by R1.27 a litre.
The price of diesel will decrease by between R1.04 and R1.05 per litre.
Neil Roets, CEO of Debt Rescue, said although the price reduction was great news for consumers who were struggling to pay back money they had borrowed when unsecured loans were handed out like “candy to a kid”, the overall, situation remained difficult.
“The substantial decrease in the diesel price is actually more important than the petrol price because this may lead to a decrease in consumer goods that are transported by road.
“If retailers play fair and pass on the savings, this could lead to cheaper food prices which would benefit all consumers – but especially the poorest of the poor who are struggling to put food on the table.”
Roets said that with a predicted growth rate of less than two percent forecast for the first quarter, and unemployment at record highs, consumers would remain under pressure.
“The fact remains that the overall economic outlook remains grim as millions of consumers are unable to service their debt, resulting in ever greater numbers having to seek help from debt counsellors.
“Debt Rescue has been growing at a phenomenal rate because so many consumers are on the verge of losing their possessions to debt collectors and are resorting to debt review to help them repay their debt in a manageable way,” Roets said.
According to the National Credit Regulator’s Consumer Credit Market Report (CCMR), the total outstanding gross debtor’s book is sitting at R1.47 trillion. This represents money owed by consumers in the form of mortgages, vehicle finance, credit cards, store cards, personal loans, short term loans, pension and insurance-backed loans.
“Currently about 75% of the nett income of consumers has to be paid over to creditors which leaves very little disposable income for families to live on.”
Dawie Roodt, chief economist at Efficient Group, said further decreases could be expected during the year because of the downward slide in the crude oil price provided the rand remained steady.