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Africa|Energy|Financial|Petroleum|Resources|Services
africa|energy|financial|petroleum|resources|services

February petrol price hike could push more than half of South Africans below the poverty line

1st February 2023

     

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The unexpected petrol price hike announced by the Department of Mineral Resources and Energy (DMRE) has sent shockwaves across the country. The increase, which is set to kick in on Wednesday 1 February, is a complete reversal of conditions at the start of the year and even the middle of the month, where a petrol and diesel price cut was still on the cards. 

Motorists will now have to fork out an additional 28c per litre for both 95 and 93 Octane Petrol, while diesel will be hiked by between less than a cent and around 9c a litre. The latest price hikes will push Gauteng petrol to R21.68 a litre, from R20.14 a year ago. The main driver behind the higher local prices is the rising cost of international petroleum product prices, pushed higher by a stronger global oil price.

The latest fuel price increase, which comes in the wake of a series of steep rate hikes announced by Governor of the Reserve Bank, Lesetja Kganyago and NERSA’s unsettling news of a massive 18.65% increase in electricity tariffs that will kick in in April, extinguishes the last flame of hope of a better year for South Africans. 

According to the Automobile Association (AA), the increase will put an even bigger burden on consumers who are already under strain due to the rising costs of living in South Africa. This reaffirms the urgent message that CEO of Debt Rescue Neil Roets has been stating for the past few years, that consumers are being pushed to the brink. “We again want to urge the government to revisit the fuel pricing structure with a view to finding ways to mitigate against this and other possible increases in future,” the AA said. “Consumers can simply not afford any more price shocks, and considering the impending 18.65% increase to electricity rates, an increase to the levies will deal a massive blow to personal finances.” 

Roets, who consistently raises his voice on behalf of consumers, warns that it is simply unsustainable for authorities to continue to hike the prices of goods and services that people absolutely cannot do without. “We are all hanging on by a very thin thread, and the most vulnerable households suffer the most when energy, fuel and food prices skyrocket.  It is simply unacceptable that the powers that be continue to mete out this punishment, with seemingly no restraint. The general consensus among the country’s citizens is that nobody is listening anymore.”  

It should come as no surprise then to learn that, right now, more than half (55.5%) of South Africa’s total population – around 30.4 million people – live below the country’s upper-bound poverty line of R1,417 per month. This is according to the Pietermaritzburg Economic Justice and Dignity group’s (PMEJD), latest figures. The group says that more than a quarter (25.2% – or 13.8 million) live below the food poverty line of R663.    

Roets says that it is inevitable that consumers will lean even more heavily on their credit and store cards to get through each month.  “In fact, we are seeing more and more people default on their debt. Consumers are being squeezed from both sides, with the rising cost of living impacting on their normal living expenses, and the cost of their debt repayments on the other side, because of the recent interest rate increase,” adds Roets.

“My advice to those who fall into this trap is to seek help from a registered debt counsellor who can assist them to manage their financial predicament. This has been a very successful solution for thousands of consumers who are plagued by over-indebtedness,” concludes Roets. 

Edited by Creamer Media Reporter

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