The department of energy is expected to announce a slight decrease in the petrol price for March 2017, but this won’t mean much for South African consumers with fuel and Road Accident Fund levy increases on the way.<\/p>\n
Current projections based on the latest available data from the Central Energy Fund point to a petrol and diesel price decrease of 9 cents and 2 cents, respectively, from Wednesday 1 March.<\/p>\n
However, tax adjustments announced by finance minister Pravin Gordhan means that April 2017 will see the fuel levy go up by 30 cents per litre, while the RAF levy will go up by a further 9 cents, adding 39 cents to both petrol and diesel prices.<\/p>\n
This is going to send shock waves through the economy, warns Debt Rescue CEO, Neil Roets, as consumers will be hit from all sides as a result of this, and other taxes.<\/p>\n
According to Roets, on top of the coming fuel price hikes,\u00a0the National Energy Regulator of South Africa (Nersa) has\u00a0given Eskom its approval to increase electricity prices by 2.2%, also effective from the beginning of April.<\/p>\n
“(This) is also going to have a seriously negative impact on consumers because municipalities are likely to hike their tariffs even higher,” Roets said.<\/p>\n
Another problem is the possibility of removing the zero VAT rating on fuel, which would see the country’s petrol price be subject to 14% VAT. This would in effect hike the price by another 14%, Roets said.<\/p>\n
\u201cDeeply indebted South Africans who are already at their wits end because of rising food prices and crippling taxes will be hit hard by this decision.<\/p>\n
\u201cConsumers are already up to their necks in debt. With the increase in the fuel price that VAT will cause and the commensurate hike in the prices of almost everything else because of the heavy reliance on road transport, it is going to make for a toxic mix that is going to severely impact the more than half of all South Africans who are three months or more behind in their debt repayments.\u201d<\/p>\n
The debt expert noted that since January, his company has seen a double-digit increase in the number of South Africans approaching debt counsellors for help.<\/p>\n
Total consumer debt now stands at close to R1.6-trillion (according to the latest figures released by the reserve bank) which shows that South African consumers have not cut back on spending.<\/p>\n
A recent World Bank index has also shown that South Africa is one of the most indebted countries in the world.<\/p>\n