TOUGH times lie ahead for hard-pressed South African consumers as fuel and electricity prices kick in this month.
The Department of Energy on Friday announced increases in fuel prices, with effect from Wednesday. Petrol 95 and 93 will rise by 88c a litre and 86c a litre, respectively Diesel 0.05 percent and 0.005 percent would increase by 95.7c a litre and 97.7c a litre, respectively, the department said.
It attributed the increases to the 30c per litre increase in fuel levies announced by Finance Minister Pravin Gordhan in his Budget speech in February, an increase in transportation costs as a result of increases in pipeline tariffs and road transportation tariffs and increases in the petroleum prices in the international market.
75% Amount majority of indebted consumers already owe of their monthly pay
National Energy Regulator of SA (Nersa) last week approved an increase of 23.03 percent in allowable revenue for Transnet’s petroleum pipelines system. As a result of the increase in allowable revenue, pipeline tariffs will rise by 18.56 percent, with effect from Wednesday
Meanwhile, electricity increases kicked in on Friday for Eskom’s direct customers. Increases for users who are supplied by the various municipalities will be effective in July. The looming increases add to the burden of consumers who are already battling rising food prices.
Reserve Bank governor Lesetja Kganyago last month said food prices had been accelerating faster than previously expected, due to the weaker exchange rate and the intensification of the drought, resulting in an upward revision to the food price forecast. He said manufactured food price inflation measured 7.8 percent in the producer price index, while agricultural prices increased by 25.9 percent.
The increases are likely to push more consumers deeper into debt. Debt Rescue chief executive Neil Roets said the company had seen a “double- digit” increase in applications for debt counselling.
“Figures released by the National Credit Regulator and Statistics SA stated that the majority of indebted consumers already owed 75 percent of their monthly pay to creditors,” Roets said.
He said the petrol and diesel prices would hit consumers like a ton of bricks. “Add to this a predicted 7 percent inflation rate with food inflation expected to rise to 12 percent, the economic outlook for the future is bleak for consumers who are already struggling to repay their debt,” Roets said.