NEWS: Fuel price decrease will bring welcome relief to profoundly indebted SA consumers

Deeply indebted consumers who collectively owe around R1.44 trillion will get some relief when the petrol price drops 67 cents a litre on Wednesday.

Neil Roets, CEO of one of South Africa's largest debt management firms, Debt Rescue, said there had been a steady decline in the ability by indebted consumers to repay loans.

“This decrease in the fuel price is going to help many South Africans who had been pushed into dire poverty by a variety of increases over the past months including an 8% hike by Eskom in the electricity price, the .25% increase in the lending rate imposed by the South African Reserve Bank and an above-inflation rate increase in the costs of basic necessities such as food.

“Judging by available economic data, there may be a further decrease in the fuel price if the price of Brent Crude oil continues to decline,” Roets said.

Dawie Roodt, chief economist with the Efficient Group, said he was delighted with the decrease and that it would bring welcome relief to hard-pressed consumers.

"It is definitely going to put a few extra rand in the pockets of consumers. Now would be a good time to pay off outstanding debts and try and build up a nest egg for a rainy day,” Roodt said.

He ascribed the decrease largely to the decrease in the price of crude oil and said further decreases in crude oil prices could be on the cards.

“The United States is close to being self-sufficient in their oil demands thanks to new technologies like shale gas extraction and reviving old oil wells with new methods of extracting remaining oil reserves.”

Roets said a major problem still facing indebted consumers was the fact that unemployment figures remained high at around 24% overall and almost double that for young people between the ages of 16 and 34.

“With really slow economic growth of .6% over the past quarter and consumers under severe financial pressure thanks to years of easy money from unsecured lenders and rising prices, the decrease comes at a time when this decline could really help the overall economy and particularly the hard pressed middle class in South Africa," he said.

Roets said it was an established fact that when the fuel price went up, goods and services rose in line with the increase.

“When the petrol and diesel prices decrease as they have now, we very seldom see much in the line of decreases in overall prices so consumers are still going to pay much the same prices for food and other important services such as electricity.”

Roets said one of the best ways for distressed consumers to get out from under their mountains of debt was going under debt review.

“This enables them to negotiate a repayment package deal with their creditors that was affordable and at the same time protect their assets against seizure by debt collectors.”

Roets said a clear indication of just how stressed consumers had become was the steady increase in the number of consumers who were seeking relief by going under debt review.

“We are seeing double digit growth in the number of new clients who are approaching us to help them out of their debt quagmire. Sadly we are not able to help all of those individuals who are seeking relief because at the very least they have to be employed and have to be able to pay back an agreed sum of money that we negotiate for them with their creditors,” Roets said.

For more information, please contact Neil Roets on his cell: 083 644 7406 or e-mail neil@debtrescue.co.za URL: www.debtrescue.co.za

(SAPA)


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