Durban – The 26 cents a litre increase in the price of 95 octane petrol and 24 cents a litre hike in the diesel price in July will be followed by an expected increase of around 25 cents a litre in August.
Efficient Group economist Dawie Roodt said the increase could even be greater if the local currency continued its slide and if the price of crude oil rose any further.
“We are now paying more for fuel than ever before in the history of our country and this is going to have a significant impact on the growth of the economy.”
Neil Roets, CEO of one of the largest debt counselling companies in South Africa, said the now almost monthly increases in the fuel price was going to add significantly to the dire circumstances faced by deeply indebted consumers.
“Despite government promises to have another look at the 1% VAT increase nothing has happened so far. The cost of water and electricity in Johannesburg and Cape Town is increasing as is the price of food and pretty much everything else.
“There is not a glimmer of hope that the massive unemployment situation is going to resolve itself anytime soon nor that the growing national debt is going to come down.
“Instead we read about how the people of the Eastern Cape had R1,6-billion stolen from their fiscus and how government officials bought fancy cars, smart clothes and treated themselves to wining and dining at expensive restaurants.
“The harsh reality is that consumers are saddled with the burden of a collective debt of more than R1,37-trillion in outstanding loans that have not been repaid and accounts that have not been settled.
“More than half of consumers are three months or more in arears with their repayments and this figure is expected to keep climbing steadily as South Africans are getting deeper and deeper in debt,” Roets said.”
He said experience had shown that when the fuel price increased it affected the prices of all other goods and services because the majority of freight was transported by road.
Roets said Debt Rescue and most other debt counselling firms were showing double digit growth rates because so many more consumers were getting into trouble and were compelled to seek relief by going under debt review.
“That has become pretty much their last resort to hold on to the few possessions that have not as yet been grabbed by predatory debt collectors,” Roets said.
“We have gone way past the point where consumers who aspire to join the ranks of the middle class can dream of achieving that goal. The new aspiration is to put sufficient food on the table to avoid family members going to bed hungry and the latest round of price increases are going to substantially aggravate that situation.”