Consumers are going to be squeezed even tighter next month with another hike expected in the price of fuel.
Neil Roets, CEO of debt counselling firm Debt Rescue, says petrol is expected to increase by 42 cents, while diesel is expected to be 39 cents a litre more expensive.
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“The increase in fuel price is directly attributed to a ratings agencies downgrade, which has seen the rand hover around R13.55 to the dollar,” says Roets.
The increase in fuel is also expected to have an impact on the cost of other services and goods.
“The South African economy is largely powered by diesel and all goods transported by road would reflect the increase,” adds Roets.
He says the increase in the fuel price will be the first setback for consumers, as a direct result of the downgrade.
“Growing unemployment and a slowdown in our already abysmal growth rate of 1.2% will soon follow, as foreign investors seek greener pastures.”
Standard and Poor’s (S&P) and Fitch have recently downgraded the country to junk status, while Moodys has placed South Africa on review for a possible downgrade.