Wealth

Big shift for drivers in South Africa

Caitlyn Hilliard-Lomas

 ·4 Jun 2026

The significant increase in petrol prices, which have risen by R6.53 per litre since April, has prompted consumers to adjust their spending habits, leading to fewer people travelling. 

This is according to financial experts at Investec, who said that by the end of April, many South Africans had already cut back on approximately 30% of their expenditures following the initial R3.06-per-litre hike. 

Data from Discovery Insure also indicates that driving behaviour has become more deliberate. 

The group reported that the average number of trips has decreased, and travel distances have been shortened as people combine journeys to save fuel.

Despite these adjustments, essential travel still incurs fuel costs, resulting in a higher overall fuel bill. 

As a result, experts warn that discretionary spending in other areas will need to be reduced to accommodate a finite budget.

Additionally, a SpendTrend26 survey of South African credit card holders earning more than R100,000 per year shows that the frequency of dining out and ordering takeaways is declining, while home cooking has increased, particularly among millennials.

“Rather than increasing discretionary spending, households are adapting under pressure, using rewards, budgeting tools and value-seeking strategies to stretch their spending,” said Investec Chief Economist Annabel Bishop.

The report revealed that household debt was 62.5% of disposable income in the first quarter of 2025, decreasing to 61.8% by the fourth quarter of 2025. 

This reduction was attributed to interest rate cuts, which lowered debt service costs from 8.9% to 8.4% of disposable income, allowing households to allocate more funds toward debt reduction through higher monthly payments.

Financial strain on households has increased due to slowing income growth. The PayInc net salary index showed that salaries fell 0.1% month over month and 1.1% year over year in February. 

The index revealed that employment growth has also been weak, rising by only 0.5% year-over-year in 2025 before declining by 2.0% year-over-year in the first quarter of 2026. 

The number of discouraged job seekers, those not reflected in formal employment figures, increased by 8.0% year-over-year, contributing to a slight 0.5% decrease in the unemployment rate.

In the second quarter of 2026, the cost of living surged, with CPI inflation rising to 4.0% year-over-year, up from 3.1%. 

This increase, according to Bishop, is expected to continue, which could erode real consumer incomes and negatively impact household consumption expenditure (HCE) growth.

Fuel price inflation

The Department of Petroleum and Mineral Resources has announced the official fuel price adjustments, effective Wednesday, 3 June 2026.

In May, global oil prices stabilised above $100 a barrel, following the disruptions caused by the Iran War in March and April. 

Although prices remained in a narrow range above $100 for most of the month, they dropped significantly as the market anticipated a possible truce between the United States and Iran.

This decrease in market prices occurred too late in the month to make a considerable impact on recoveries.

Despite this, the stability in pricing, along with the rand’s resilience, led to both petrol and diesel prices entering an over-recovery phase. 

Typically, this would result in a price reduction at the pumps. However, the National Treasury has decided to reinstate part of the June fuel levy cuts, specifically R3.00 per litre for petrol and R3.93 per litre for diesel.

As a result, R1.50 per litre will be added back to petrol prices rather than lowered, leading to an increase of R1.43 per litre at the pump. 

For diesel, R1.96 will be added back to the price, but fortunately, this will still result in a price reduction at the pumps, with prices declining between R2.62 and R3.25 per litre.

The table below outlines the changes for June 2026: