The real effect of the increased fuel price

With the introduction of South Africa’s latest fuel increase, it’s once again time for South African consumers to restructure their budget and tighten up those purse strings. When we stop and consider the real effect of the increased fuel price, the outlook – unfortunately – is not bright, with many consumers forced into a difficult position of redefining their essentials.

According to Kevin Lings, chief economist at Stanlib, the petrol price increase of R1,21 per litre puts petrol inflation at 33.9%. Considering the ongoing economic impact of Covid-19 and the fact that a high percentage of South Africans either lost their jobs or suffered pay cuts, this level of inflation is devastating. When considered in conjunction with the latest electricity price increase of 14% this year, it’s no wonder consumers are panicking over their future.

Whenever the price of fuel undergoes an increase, we know that the cost of almost everything else in our lives increases as a direct result. We immediately prepare for higher costs of living, and while some can easily weather the storm, the vast majority of South Africans earn considerably less than a liveable income, making them unlikely to survive without suffering extreme cutbacks. Average consumers who are already struggling with the impact of low-income jobs have to cut back on essentials such as food and electricity while short paying various creditors and relying more heavily on credit cards to make ends meet, placing themselves even further in the debt trap.

The real effect of the increased fuel price affects the underpaid majority who are now struggling to afford the cost of travelling to work while needing to feed a family on a fraction of their budget. The 33.9% petrol price increase means that many individuals will have to cut back on expenses such as medical aid and forego privately funded doctor’s visits. South Africans are endangering their health for the simple fact that healthcare has become a luxury item.

From the pressure of simply making it to work to the threat of potentially losing a home and attempting to maintain higher levels of debt than ever before, we are standing on the precipice of unprecedented times. If you – like countless other South Africans – are panicked over the thought of your financial future, Debtco Group can assist by helping you gain control of your debt. From restructuring your payment agreements, protecting your assets, rebuilding your credit rating and eliminating your debt stress, we can help you come out the other side.

If you would like more information on our services, please contact us for an assessment.