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South Africans scrape their pockets for extra coins as another diesel hike takes effect.
Diesel increased by 18 cents per litre on Wednesday, setting off alarm bells for struggling consumers as they anticipate a likely price increase of essential goods.
While businesses are still trying to come to terms with government’s costly announcement, economists warn of the possibility of a further hike in the second half of the year.
So, heads up SA – you might have to tighten your seatbelts for a bumpy ride ahead.
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Neil Roets, CEO of Debt Rescue is concerned that consumers will bear the ripple effects of additional operational costs incurred by logistics firms.
Unfortunately, they’ll also have to foot the bill as retailers hemorrhage money to keep generators running during load shedding.
Commuters relying on public transportation to get to work daily are also crossing their fingers, hoping they won’t be required to top up their transport fare.
Roets says even though a decline in petrol prices provides some breathing room, the increase in diesel prices will exacerbate inflation across the board.
‘Diesel price hikes increase the cost of inputs and supplier transportation, elevate suppliers’ operating expenses, in turn, impacting on customers’ disposable income and living expenses’, Roets warns.
‘This locks the country into a vicious [cycle] that can only spell financial disaster for the average South African,’ Roets explains.
ALSO READ: Fuel price: Petrol to decrease but rise in diesel will hit pockets in July
Rising living costs have already forced South Africans to turn to credit, just to get through the month, with most defaulting on loan repayments, so the diesel increase couldn’t have come at a worse time.
“South Africans are teetering on the brink of financial ruin, having absorbed months of living cost increases, such as electricity, fuel, food, and water – all necessities that they cannot do without’’, Roets says.
When it comes to consumer debt, Roets recommends for those struggling with debt to seek help from a registered debt counselor, to break the cycle.