With consumers battling to absorb an increase in VAT and steep petrol hikes, the latest motor trade sales from Statistics South Africa show that for the first time since 2014, South Africans are spending more on fuel than on buying new vehicles,
The spending on new vehicles sits at 26.41 percent, lower than the estimated 27.94% of total 2018 spend on fuel, said South African Market Insights, Business Insider SA reported.
For the year to date, South Africans have spent on average R14.76 billion per month on fuel, and just more than R14 billion on new vehicles.
“This is however not an uncommon occurrence in South Africa. During the financial crises fuel prices skyrocketed and new car sales plummeted as people cut back on their spending,” the finance analysis site said.
South African Market Insights also believes the gap between the two will widen, with fuel spend far outperforming new vehicle spend as fuel prices increase.
The government is currently working on measures to decrease the economic impact of a devastating fuel price increase in July, pushing the price per litre petrol past R16 inland for the first time, with coastal areas paying R15.43 per litre.
President Cyril Ramaphosa said he is in talks with Ghanaian President Nana Akufo-Addo for a possible trade deal with the oil-producing country to decrease prices.
The DA called on Ramaphosa to reduce the R3.37 tax on a litre fuel by 20 percent.