Predicted drop in fuel price only a temporary relief

The expected petrol price decline of 70 cents a litre will be a great relief for many South Africans, but deeply indebted consumers are in for a rough ride.

The predicted 70c/l drop in fuel and 50c/l drop in diesel are said to only benefit indebted consumers for a short period of time.

This is due to the Rand taking a hammering, after having briefly decreased to an all-time low of R14 to the Dollar. The Rand is also not expected to stage a recovery any time soon.

Neil Roets, CEO of one of the largest debt management companies in South Africa, Debt Rescue, said while he welcomed the fuel price decrease, consumers should be mindful that other economic indicators remained largely negative and should understand that this was not a windfall that should encourage going on a spending spree.

“It is belt tightening time for the storm that might hit us later this year, as economic growth is going to be way lower than predicted by the government.”

Independent economist, Dawie Roodt, said consumers should do everything within their power to decrease debt as far as possible and avoid stacking up new debt.

“We are facing a very uncertain future and South Africans need to be mindful of this and prepare to tighten their belts for the tempest that is coming our way,” Roodt said.

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