Consumers warned of worsening conditions as fuel prices approach 'catastrophic' highs

This after the price of Brent Crude broke through the $85 per barrel mark over the weekend.

The price hike is expected to send shockwaves to the South African market, increasing the price of fuel dramatically.

The Automobile Association (AA) predicts a 99c/l increase for petrol while diesel and illuminating paraffin will look set to increase by a whopping R1.42/l.

Roets says consumers cannot afford the rising cost of living.

"Petrol price increases is going to have a very bad effect on consumers because of the fact that consumers are already struggling financially. So, if we see these petrol price increases what it means is that the price increases filters through to the prices of other goods and services as well.

"Salaries are not going up in line with these petrol price increases so it's just making life difficult for consumers out there. Because of the whole pandemic and because of the fact that people have been struggling with lower salaries and so on, this so going to a devastating effect on consumers, and this is the last thing that consumers can really afford at this stage," Roets says.

Roets adds the ramifications of the Covid-19 pandemic and the high cost of living have sent many consumers into more debt.

"We've seen a massive increase of people becoming over-indebted, actually to such an extent that some people are so over-indebted that it's sometimes difficult to help them," he says.

"People have lost jobs, businesses have closed down and it's just a very, very dire situation at the moment."

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Economists agree that South Africans will be faced with more difficult in the coming month.

Chief economist at economists.co.za Mike Schussler says consumers' hardships may be further compounded by the South African Reserve Bank raising interest rates, which have been kept fairly low for much of the year.

"We are looking at the consumer being squeezed by the oil prices and it's not just a South African problem," says Schussler.

"It will hurt the consumer, it will lift inflation, it will mean the central bank will have to look at raising interest rates higher than they would like."

US President Joe Biden is tipped to have called on the OPEC cartel to increase oil output to stabilise prices.

Schussler doesn't believe the group will abide by the calls.

"I think OPEC is going to play its own game, whatever they want to do.

"For now, I don't think OPEC is going to listen to anybody. They've also got their own cash crunch to look out for, so I think for now oil price are probably going to stay high; if not higher."