Debt counselling company, Debt Rescue, says it has experienced a substantial increase in financially distressed consumers applying for debt review over the past few months.<\/p>\n
Debt Rescue CEO, Neil Roets said that since the beginning of January there had been a marked increase in the number of consumers who sought relief by going under debt review.<\/p>\n
\u201cWe have seen an increase of over 20% over the past several months of the number of debtors approaching debt counsellors for help.\u201d<\/p>\n
Amid the gloom of economic recession and downgrades by credit rating agencies, consumers can expect some relief in the form of a sharp drop in the petrol price in July thanks to a resilient rand and a declining oil price.<\/p>\n
Independent economist Dawie Roodt expects the petrol price to decline between 60 and 64 cents a litre in July, with diesel dropping by around 60 a litre.<\/p>\n
\u201cThe rand has remained largely stable against the US dollar in the first half of June despite all the political shenanigans that have been plaguing our political landscape.\u201d he said.<\/p>\n
Roets warned however, that it could be a very different story in August if the three ratings agencies decide to further downgrade the country\u2019s rand-denominated debt to junk status.<\/p>\n
\u201cThis could have a significantly negative impact on the currency leading to currency outflows resulting in a higher US dollar crude oil price.\u201d<\/p>\n
He cautioned that this drop in the fuel price should not be seen as a windfall.<\/p>\n
\u201cWe are still technically in a recession with growth well below 1%. The rand will probably decline further in value against the dollar which is going to impact on everything from fuel to food.<\/p>\n
\u201cConsumers are already up to their necks in debt carrying a combined debt load of R1.66-trillion. If we see a significant rise in the fuel price in August, this is going to have a substantial impact on the prices of virtually everything and let us not forget that we are technically in a recession with two quarters of negative growth behind us.\u201d<\/p>\n
Should the fuel price increase in August, there would be a commensurate hike in the prices of almost everything else because of the heavy reliance on road transport, Roets said.<\/p>\n
\u201cIt 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