SA Fuel prices - R20 per litre is forecast

How rising fuel prices are affecting driver habits and crushing service stations – as R20 per litre is forecast

According to Lightstone and Tracker

As per new data from Lightstone and Tracker shows how rising fuel prices have impacted driver behaviour in South Africa – with economists forecasting worse conditions in 2019.

Some economists have warned that South Africans should expect oil prices as high as R17.90 by the end of the year and could go as high as R20 per litre by the end of 2019, on a weaker rand, and rising oil prices.

Despite government’s claims that it is looking for a plan of action to combat these rising prices, new data from Lightstone and Tracker shows that drivers are already changing their driving and spending habits to cut costs.

“Lightstone and Tracker have developed an economic monitoring report based on a sample of 250,000 vehicles active over the last 12 months running from July 2017 to June 2018,” said Michael Du Preez, product and marketing executive at Tracker.

These vehicles are representative of the entire country and have cumulatively travelled over seven billion kilometres, in over 500 million trips in the last 12 months.

The data showed three clear trends in driver behaviour over the period, all tied to rising oil prices – specifically, drivers travelled shorter distances, with fewer visits to the petrol station, and to the mall.

Travelling shorter distances

Countrywide, there has been reduced activity in distances covered – though this is not equally severe in all regions. Limpopo has seen the smallest decline, and Mpumalanga and Northern Cape dropped most.

However, the base in Gauteng is much bigger than other provinces so this 6% drop accounts for 40% of the total mileage decline countrywide.

The trend map for fleets and trucks have shown the pressure that is on the logistics sector, while busses and taxis have also seen a noted decline in distances travelled.

According to Lightstone, both sectors see seasonal changes (and the bus industry, in particular, has been hit hard by strikes), but neither has returned to levels seen in previous years, pointing to a very real decline.

Retail activity

Another metric used to determine the change in consumer behaviour is the traffic at malls.

The decline has not been equally severe at all shopping centres with Fourways Mall experiencing the biggest decline, possibly due to ongoing renovations.

Petrol stations

Service stations had an even more severe drop – 10% lower than a year ago, Lightstone said, pointing to June 2018 as being the worst month.

An increase in March 2018 is possibly the result of Easter weekend travel, it said.

“We must remember that service stations fill a dual purpose of various retail activities and of filling up with fuel,” the group said. “The drop in visits is therefore indicative of people not requiring as much fuel as often and also in part that the retail activity at these service stations has decreased.”

BP, Sasol and Total experienced a bigger drop-in visit, and Engen had the lowest drop. Engen and Shell had a marginal increase in market share from Q3 in 2017 to Q2 in 2018.