“Drought Will Offset Fuel Price Drop”

While a drop in the petrol price of 22c per litre would be welcome relief for consumers, it was likely to be offset by the severe drought plaguing South Africa’s grain-producing regions.

That is according to Debt Rescue chief executive Neil Roets, who said the drought would lead to significant price increases in basic foods.

The Automobile Association expects a petrol price drop of 18c to 22c, based on unaudited fuel price data released at month-end by the Central Energy Fund.

Roets said the present combination of economic factors would severely impact on consumers, many of whom were already deeply in debt.

“[Given] our massive unemployment rate of 25.5% coupled to the fact that most consumers owe more than 75% of their monthly salary cheques to financial institutions, the situation is dire to say the least,” he said.

Roets’s company is seeing double-digit increases in its growth rate as indebted consumers seek relief by going under debt review.

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