Going to bed tonight knowing that fuel will cost less tomorrow will not make life any better for consumers when they wake up.
It is good news that the fuel price is decreasing tonight, but for most South African consumers this will not make a significant difference, as they are so deep in debt and have so little income that they will go into 2026 with the same despair they had a year ago.
Minister of mineral and petroleum resources, Gwede Mantashe, announced earlier this week that the price of petrol and diesel will decrease, but while this is welcome news, the reality is that motorists will still need to fork out over R20.00 per litre for both 93 and 95 Unleaded petrol at the pumps.
The decrease of 66 cents per litre for Unleaded 93 brings the price down to R20.64, while motorists filling up with 95 Unleaded will pay R20.75 per litre. The price of diesel dropped from R20.00 to R18.52.
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Most SA families will still live under the same extreme financial stress in 2026
However, the majority of South African households still enter the new year under extreme financial duress, as debt, school fees and essential living costs converge in early January, along with high household debt and an ever-increasing gap between income and essential expenses, Neil Roets, CEO of Debt Rescue, says.
“2025 was one of the toughest years yet for South Africans from all walks of life, and the escalating cost of living locked millions of citizens into a debt cycle that they cannot escape, while the most vulnerable among us continue to suffer through each month, scraping by on wages or grants that exclude them from providing for their families.”
Data from the TransUnion Consumer Credit Index for the first half of 2025 shows that debt absorbed nearly two-thirds of consumers’ household income, with national household debt remaining elevated at about 62.7% of disposable income.
This aligns with TradingEconomics figures, which show the ratio hovering above 62%, well above the historical average of 52.3%. Roets warns these statistics suggest a thin margin for error in household budgets, making consumers vulnerable to financial shocks.
“The reality is that when debt absorbs such a high ratio of a household’s income, disruptions such as unexpected school expenses or food price increases can trigger significant financial strain, which in turn exacerbates the emotional burden that weighs consumers down. This is fast becoming a national crisis.”
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Consumers increasingly use unsecured credit and personal loans to get by
He points out that consumers increasingly use high-interest, short-term unsecured credit and personal loans to bridge the gap between stagnant incomes and rising expenses.
A significant proportion of individuals applying for debt counselling in the third quarter of 2025 (95%) reported holding at least one personal loan, while 57% had payday loans.
Roets says that insights from the latest Eighty20 Report for the third quarter of 2025 show that more people use credit for survival, operating on very thin margins, especially retirees and middle-income workers.
In an effort to relieve the financial pressure, lenders are restructuring or extending loan terms for longer repayment terms, but Roets says this is not really helpful as it means consumers end up paying more for much longer.
As a result, defaulting is a major threat, Roets says. “Residential mortgage defaults continue to rise strongly in South Africa despite significant reductions in interest rates and inflation over the past two years.
“This indicates that South African consumers are still under immense financial strain amid a stagnant economy and elevated unemployment.”
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Increased financial distress major threat to stability of SA financial system
This was also raised as a major concern in the Reserve Bank’s latest Financial Stability Review, which outlines the financial pressure South Africans live under.
The Review identified the increased financial distress among households and small businesses as one of the major threats to the stability of South Africa’s financial system, noting that the combination of persistently low economic growth, high levels of unemployment, and elevated debt-service costs continues to weigh on household finances.
According to the latest TransUnion Consumer Pulse Study for the third quarter, 36% of consumers said they expect to be unable to pay at least one of their current bills or loans in full.
At the top of their list of concerns are the impacts of price increases, specifically groceries (82%), utilities (60%), car fuel (52%), and medical care (52%).
Debt Rescue’s own consumer survey results, released in December 2025, also paint a grim picture of households across the country either hanging on by a thin thread or no longer able to hang on at all, showing that 94% of South Africans are entering the new year under dire financial strain.
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Food prices top concern for SA consumers, not fuel price
Roets says the cost of food is clearly a top concern for South Africans, with millions of households no longer able to afford nutritious daily meals to feed their families.
With food prices ranking highest on consumers’ concerns, the latest findings from the Pietermaritzburg Economic Justice and Dignity Group for December strike a warning chord.
The household food basket showed a month-on-month decrease in the average cost, which remains far beyond the reach of families who depend on low wages and social grants.
Civil society groups have warned that, despite the modest decline in food prices in December, millions of low-income households remain under severe financial strain, saying the reflected relief does not translate into meaningful food security.
“It is deeply concerning that authorities are ignoring this red flag. We are sitting on a ticking time bomb,” Roets warns.
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Inflation rate remains a concern for consumers even if it is low
Inflation is another top indicator of consumer concern as the nation enters 2026, with 82% of respondents in the TransUnion Consumer Credit Index for the first quarter of 2025, saying they are extremely or very concerned about inflation, with rising costs continuing to be a major stressor for consumers as they navigate household budgeting and financial planning.
“South Africa’s household debt-to-disposable income ratio currently stands at 61.6%, with overall financial pressure remaining high and a significant portion of income going to essentials and rising consumer debt for daily needs,” Roets says.
“The writing is on the wall. With the January 2026 repo rate announcement just weeks away, the question is whether the South African Reserve Bank will move to alleviate some of the financial pressure from the shoulders of millions of citizens in dire need of relief from the burden of debt.”