Consumers can’t afford fuel levy, says debt expert

2016-05-31 19:57
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Cape Town - Consumers can't afford the petrol levy amid growing levels of debt and soaring costs of living, according to Debt Rescue CEO Neil Roets.

In a studio interview with News24 Live, Roets said that although the petrol levy is a meaningful form for revenue collection for the state, consumers can't afford it with sky-rocketing petrol prices.

At midnight the the pump price of petrol goes up by 52 cents per litre for all grades, while diesel increases by a whopping 76c/l.

April's price hike included a 30c/l increase in the general fuel levy, as well as adjustments in transportation costs following the National Energy Regulator of South Africa’s approved pipeline tariff increase and the road transportation tariff hike obtained from the Road Freight Association.

"Overall we feel that with the petrol price as high as it is, consumers just can't afford the petrol levy at 30 c/l," Roets said.

"It just adds to the over indebtedness of consumers and we feel that government should rather do more to help people who are over-indebted and this is definitely not helping the situation," he explained.

Roets said that of the nearly 20 million credit active consumers in South Africa, almost half are over-indebted, meaning that they are in arrears with at least three payments on one of their accounts.

Commenting on consumers using petrol cards to fill up their tanks, Roets said: "In essence people can't afford to make use of credit when they put petrol in their cars, with more than 9 million people in South Africa already over-indebted."

He warned that it is reckless for consumers to finance petrol on credit.

Watch the full interview:

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