Petrol over R13/liter … and rising

2014-02-03 00:00

CONSUMERS should brace for more than the 39c per litre petrol price increase on Wednesday — chances are there will be another big increase next month.

This is barely a week after heavily indebted consumers — nearly half of all people with credit are struggling to pay their accounts — had to start dealing with higher interest rates.

“The chances of the price going up significantly in March again is very strong,” Investment Solutions’ economist Chris Hart said yesterday.

“People need to plan for that … This may all change if the rand stabilises, but I can’t see it happening,” he said.

Wednesday’s fuel price increase is significant as it pushes the price to fill a 45 litre fuel tank — used by most small cars — to over R600 for the first time. Just over a month ago, it cost R578,25 to fill the tank.

The diesel price will rise by 24 cents or 1,9% to R13,11 and the price of petrol will rise to R13,59 per litre on the coast.

The petrol price has risen 69% since February 2010, four years ago.

It follows January’s increase of 38c per litre and it means the price has increased by almost six percent so far this year. Last week interest rates were lifted by 0,5% points.

Economists had warned in December that another petrol price hike will have profoundly negative consequences for deeply indebted consumers.

“Higher interest rates, e-tolls and now this … I joked with staff this week about the petrol price, that maybe we should all start using Skype at work,” businessperson Andre Snyman said yesterday.

Pietermaritzburg broker Brian Andersen said the increase will affect everybody, even though he had heard South African’s still pay less for fuel than in some parts of the world.

He said some real solutions to lower transport costs were to form lift clubs or buy a smaller car — safety was not always up to standard if one opted to use minibus taxies.

Hart said he needed to travel a great deal for work purposes and he has managed to get an extra 100-200 kilometres per tank of fuel, just by driving more carefully. “It is good for road safety too,” he said.

Debt Rescue chief executive officer Neil Roets said recently the ever-increasing petrol and food prices, higher interest rates and, for Gautengers, the additional burden of e-tolls, will drive many people who have managed to claw their way out of debt, back into poverty.

The latest fuel price increase is due to the drop in the rand/dollar exchange rate — the price of Brent crude oil actually fell by $3 a barrel in Jan­uary.

The rand has slid to a five-year low amid an emerging market sell-off.as the US Federal Reserve decided to scale back on its massive stimulus programme.

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