Consumers already owing R1.37-trillion in debt will feel more heat from higher fuel and toll prices in May, said a debt expert.
Neil Roets, CEO of Debt Rescue, said in a statement that consumers will also have to contend with financial pressures from the 1% VAT increase.
Last week the department of energy announced that petrol prices would increase 49c/l on May 2, while diesel will increase by 59c/l at most. The Automobile Association also noted that toll fees have risen between 6% and 7%.
“Why on earth SANRAL decided to hike toll fees now is beyond me when it has admitted that compliance is well below 40%. Drivers who use the highways are simply ignoring their toll fee accounts in part because many of them simply cannot afford to pay,” said Roets.
“Coming on top of the increase in VAT and the 52 cents a litre levy on fuel which kicked in at the beginning of the month, motorists and consumers in general are in for a very rough ride.”
Roets explained that Debt Rescue was seeing month-on-month growth rates as more consumers are getting into trouble with debt and have resorted to debt review.
“That has become pretty much their last resort to hold on to the few possessions that have not as yet been grabbed by predatory debt collectors,” he said.
According to Roets more than half of all South Africans are now three months or more behind in their debt repayments.
“We have gone past the point where consumers who aspire to join the ranks of the middle class can dream of achieving that goal.
“The new aspiration is to put sufficient food on the table to avoid family members going to bed hungry and the latest round of price increases are going to substantially aggravate that situation,” he said. ― Fin24