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

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

Consumers have been hit hard by sharp fuel hikes over the past several months, with yet another hike expected in September.

Some economists have warned that South Africans should expect fuel 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 fuel 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 change in consumer behaviour is the traffic at malls.

When comparing different activities of 1,000 shopping centres, a sharp decline is seen from 2017 to 2018. Lightstone discovered that visits to shopping centres in the first half of 2018 was 5% lower than the last half of 2017, and this decline holds true even when the effect of December Christmas shopping and January Retail slowdown is excluded from the comparison.

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

The same trend is seen when looking at over 3,200 service stations in South Africa.

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 visits, and Engen had the lowest drop. Engen and Shell had a marginal increase in market share from Q3 in 2017 to Q2 in 2018.

According to  Lighstone, the travel patterns of these 250,000 vehicles is a respectable indicator of the population. “More so, the patterns seen in driver behaviours are an indicator of what is be expected of the months to come.”

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