Rand bites as petrol set for steep rise

Petrol prices will increase by 84 cents in July, pushing South African consumers into an even tougher financial position.

While petrol prices will increase by 84 cents per litre, diesel will go up by 78 cents and illuminating paraffin rise by 75 cents.

Petrol rises to R13.23 a litre and diesel to R12.15 in the main Gauteng inland region.

The weakening of the Rand against the US Dollar has been cited as the primary cause for the increase, the department of energy said in a statement, contributing to the basic fuel price on petrol, diesel and illuminating paraffin by 58.09 c/l, 59.29 c/l and 58.53 c/l respectively.

“The weaker Rand is mainly attributed to the slowdown in the economic growth in emerging markets and the expected slump in the demand of commodities,” the department of energy said.

“The Rand’s vulnerability was also due to negative sentiments emanating from concerns over anticipated labour disputes and market expectations of industrial actions.”

The increase of 1 US Dollar per barrel of Brent Crude oil over the review period had a minimal impact, according to the department.

A blow to consumers

“The increase in the petrol price of 84c a litre from next Wednesday – as well as the impending introduction of tolls – is going to sound the death knell for many deeply indebted consumers who are barely managing to make ends meet,” said debt counselling firm Debt Rescue.

The group’s CEO Neil Roets said that the substantial increase in the cost of goods and services because of the fuel price increase is going to add considerably to the total consumer debt now topping R1.44 trillion (as reported by Statistics South Africa).

Roets said the number of clients seeking help from his company, had almost doubled over the past six months, reflecting the the dire situation consumers find themselves in.

“There are so many people on the knife edge that the fuel price increase is just going to be the last straw that breaks the camel’s back,” he said.

More on the fuel price

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Rand bites as petrol set for steep rise