Consumers on a knife edge

2013-06-29 00:00

JUST getting by every month is going to cost the average person in South Africa an extra R200 from July.

Next month will see the perfect price tempest when record fuel prices announced by government yesterday combine with annual mid-year municipal tariff increases.

For those owing money, the timing could be devastating.

“There are so many people on a knife edge that the fuel price increase is just going to be the last straw that breaks the camel’s back,” said Neil Roets, CEO of debt counselling firm Debt Rescue.

The volatile rand is getting most of the blame for the 84c hike in all grades of petrol, which takes effect at midnight next Tuesday. Diesel goes up 78c a litre.

That means a record price at the pumps — R12,80 and R12,86 a litre for 93 and 95 octane fuel respectively at the coast. Motorists on the reef will pay R13 and R13,23 a litre.

In a statement, the Department of Energy said the currency was the victim of a slowdown in economic growth in emerging markets. But continuing unrest in the labour market also appears to have come home to roost.

“The rand’s vulnerability was also due to negative sentiments emanating from concerns over anticipated labour disputes and market expectations of industrial action,” the department said.

Global concern over the rand means more pain at home for ordin­ary people already battling to make ends meet.

Roets said the number of clients seeking help from his company had almost doubled in six months.

“Another consequence of the fuel price increase, as well as worsening economic circumstances, is going to be that it is going to push many thousands of consumers into debt counselling to try and avoid bankruptcy or getting judgments against them, and having their salaries docked by garnishee orders.”

Mike Schüssler, of independent economic research house economists.co.za, also predicted tough times ahead for the financially strapped. He agreed the topsy-turvy rand was the main driving force behind the latest petrol increase.

“The average motorist will put R119 extra into his monthly fuel bill,” said Schussler. “That, plus about an extra R60 on electricity and a few more rands on water will certainly take at least two percent away from the take-home pay that the BankservAfrica disposable salary index says we get (R10 485 per month).

“So over R200 in increases in just one month will be hard on consumers out there.”

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