A major decrease in fuel prices was recently announced by the energy department, providing South African motorists with a small measure of relief.
Petrol 95 and 93 octane will drop by 95 and 96 cents per litre respectively, although consumers shouldn’t celebrate this news just yet, according to Efficient Group Economist Dawie Roodt.
The lowered cost of petrol will be offset by increasing electricity and water tariffs and the economy remains in dire straits, Roodt said.
“The South African economy remains deeply stressed and consumers are still in a lot of trouble with unemployment looming large on the horizon for many consumers.”
“The reality is that although most commuters will save between R40 and R50 a tank when they fill up with petrol, these price reductions are going to be neutralised by substantial price increases of all goods and services in the coming months,” he said.
“There is absolutely no room for celebration because the economy remains deeply stressed and things are going to get a lot worse before they get better.”
This sentiment was echoed by Debt Rescue CEO Neil Roets, who said that the economic situation for consumers at the moment was “probably the worst since 1994 when the first democratic elections took place”.
“Most consumers have cut out luxuries from their spending some time ago and will now have to start cutting back on basic necessities just to stay alive,” Roets said.