The petrol price is set to come down by as much as R1.27 on Wednesday (7 January), and should see further decreases thanks to the downward slide in the crude oil price, according to economist Dawie Roodt.
However, this will be meaningless to consumers in the bigger picture if retailers do not pass on the savings, or if the rand does not come to the party, according to debt management firm, Debt Rescue.
On Wednesday the petrol price is set to drop by R1.23 a litre for 93 octane fuel and R1.27 for 95 octane fuel.
The price of diesel will decrease by between R1.04 and R1.05 per litre.
Debt Rescue noted that despite the relief this drop will give consumers, the greater outlook remains bleak.
According to Debt Rescue CEO Neil Roets, consumers are still struggling to pay back money they borrowed when unsecured loans were “handed out like candy to a kid”.
Roets said that with a predicted growth rate of less than 2% for the first quarter and unemployment at record highs, consumers would remain under pressure.
“The substantial decrease in the diesel price is actually more important than the petrol price because this might lead to a decrease in price of consumer goods that are transported by road,” Roets said.
“If retailers play fair and pass on the savings, this could lead to cheaper food prices which would benefit all consumers – but especially the poorest of the poor who are struggling to put food on the table.”
According to the National Credit Regulator’s Consumer Credit Market Report (CCMR), the total outstanding gross debtor’s book is sitting at R1.47 trillion.
This figure represents money owed by consumers in the form of mortgages, vehicle finance, credit cards, store cards, personal loans, short term loans, pension, and insurance-backed loans.
“Currently about 75% of consumers’ net income has to be paid over to creditors, which leaves very little disposable income for families to live on,” Roets said.
“The fact remains that the overall economic outlook remains grim as millions of consumers are unable to service their debt.”