Johannesburg – Increased fuel prices will push already debt-ridden consumers into poverty, said Neil Roets, CEO of debt management firm in South Africa, Debt Rescue, in a statement on Thursday.
The projected increase in the petrol price of around 30 cents a litre in early March is likely to push the fuel price to an all-time high of about R14.20 a litre.
“We have seen a substantial increase in the number of clients knocking on our doors seeking relief by being placed under debt review. This is to some degree the result of the general increase in the cost of living but the monthly increase in the fuel price is beginning to play a major role,” said Roets.
“The reality is that because our railway system is broken, every single commodity in this country has to be transported by road and every time there is a fuel price hike, the cost of pretty much everything rises in the line with the fuel price increase,” he added.
According to the National Credit Regulator there are 9.76-million blacklisted consumers in the country, while Statistics South Africa puts total consumer debt at around R1, 44-trillion.
“We are already seeing a dramatic growth in the number of people who are seeking protection from their creditors by going under debt review.”
“The writing is on the wall for many middle class families who have only recently escaped from dire poverty. Many will be pushed back into poverty,” Roets said.
According to economist Dawie Roodt if the rand does not deteriorate any further, the petrol price for all grades is set to increase by between 30 to 33 cents a litre while diesel will increase by between 25 to 26 cents a litre taking both to historic highs.