An expected huge hike in the price of petrol will have profoundly negative consequences for deeply indebted consumers, an expert said on Tuesday.
Fin24 reported that petrol could increase by as much as 32c per litre (c/l), according to data from the Automobile Association of South Africa (AA).
Petrol is showing a potential climb of between 28 cents and 32c per litre, with 15c per litre for diesel and 9c per litre for illuminating paraffin, the AA said on Thursday last week.
“The writing is on the wall for many middle class families who have only recently escaped from dire poverty. Many will be pushed back into poverty,” said Debt Rescue CEO Neil Roets.
The looming increase is likely to push cash-strapped consumers into bankruptcy and many others being blacklisted for debt, he said.
“We have seen nearly twice the normal number of clients knocking on our doors seeking relief by being placed under debt review.
“This was to some degree the result of the general increase in the cost of living but we are also beginning to see consumers who are frightened by threats they have received from SA National Roads Agency Limited (Sanral) over unpaid toll fees.”
He said official figures indicated that total consumer debt was now topping R1, 44-trillion and that there are 9.76-million consumers with impaired records.
“We are already seeing a dramatic growth in the number of people who are seeking protection from their creditors by going under debt review.
“There has also been a significant growth in the number of consumers who are having their salaries docked by garnishee orders and who are being blacklisted because of judgements against them.”
He said rising food and fuel costs and slow economic growth are making it difficult for many South Africans to pay back their loans on time.