Durban – Experts predict that whatever relief consumers got from government keeping down the September fuel price increase is going to be wiped out with a whopping R1.20 – to R1.30 per litre increase in October… and yet further increases are expected in November and December.
With fuel prices currently at R15.86 a litre, such hikes will take petrol over the R17 a litre mark.
Independent economist Dawie Roodt said it was highly unlikely based on the existing formula used by the energy department to calculate the under or over recovery based on the Rand/US Dollar exchange rate and the price of crude oil, consumers could expect to pay well over R1.20 more per litre for petrol and diesel in October.
“That is going to further stress out highly indebted consumers and add to the already negative economic sentiment created by the land expropriation issue and other pending issues like widespread corruption and state capture. It could even the last nail in the coffin when the ratings agencies announce their latest ratings for South Africa’s sovereign debt,” he warned.
Neil Roets, CEO of one of the largest debt counselling companies said the massive expected fuel price increase could be the straw that breaks the camel’s back. “We keep saying that consumers, who collectively owe more than R1.7 trillion, literally have reached the end of their tether.”
Roets said it was highly likely that the local currency would weaken further against the dollar and that the price of crude was going to spike.
“What may have been a technical recession is almost certainly now going to balloon into a full-scale recession despite optimistic utterances from President Ramaphosa,” Roets said.
“More than half of all consumers are three months or more in arrears with their repayments and this figure is expected to keep climbing steadily as South Africans are getting deeper and deeper in debt. What is deeply disturbing is the fact that the overwhelming majority of our clients have little or no hope that things will improve anytime soon,” said Roets.