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South Africans Advised to Brace for Looming ‘Devastating’ Cost of Living Increases

May 18, 2022

Umm Muhammed Umar

There are growing concerns regarding the impending increase in the fuel price. The AA has warned that South Africans should get ready for fuel price shocks as never seen before. The latest estimate predicts a petrol price increase of between R1.93 and R1.97 cents a litre in the first week of June, with diesel expected to rise by R1.60 to R1.62. Added to that, the R 1.50 discount on the general fuel levy will fall away at the end of June. Debt Rescue’s Annaline van der Poel spoke to Radio Islam.

With the Rand trading it’s at its worst since November, van der Poel said that It’s been quite a shocking period. She said, “the fuel price levy reduction that we’ve seen from governments, that we have seen for the last few months, obviously falls away, and that impact we’re (still) going to see, and…….one of the factors we mustn’t underestimate in the not-too-distant future is that large parts of China have been in lockdown for the last couple of weeks.” She elaborated, “And what this means is there’s a reduced demand on fuel, and when their demand starts increasing again, what is it potentially going to be doing to the fuel price?”. The fuel price increases, in excess of 45%, since the beginning of January 2021, has had, according to van der Poel, a devastating impact on consumers.

Government is apparently discussing the possible outcomes of the re-imposition of the full fuel levy. Van der Poel said, “We’re just waiting to see if there’s any solution that, hopefully, is going to help soften the blow.” She also expressed concerns about the interest rate announcement expected on Thursday. She said, “currently the expectation is that we’re looking at a half a percentage increase. And although it sounds like a small thing……it impacts every single credit agreement you already have.” She explained, “what’s going to happen is, your existing instalments, unless they’ve been fixed – which usually they aren’t – are going to be going up now that we’ve got the fuel price added to it.”

Van der Poel advised that consumers draw up a budget, and examine where living expenses could be cut. She added that consumers should avoid incurring debt, “especially if you start factoring in the impact of future interest rate hikes, which are definitely coming.” She advised consumers to rid themselves of any contracts that they were not using. Regarding insurance cover, van der Poel said, “Review your insurances – make sure you’re correctly covered and not paying for things you might not have anymore.” She stressed that consumers reviewed their lifestyles immediately, “so that we can try and make sure that we leave some breathing room for the changes that are lying ahead.”

 

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