Consumer confidence plunges on fuel shock

by AKANI CHAUKE 
JOHANNESBURG – SOUTH African consumer confidence deteriorated sharply in the second quarter of 2026 as the economic fallout from the Iran conflict and the temporary closure of the Strait of Hormuz pushed fuel prices higher and intensified pressure on household finances.

The latest FNB/BER Consumer Confidence Index (CCI) fell to -19 in the second quarter from -7 in the first three months of the year, reversing gains that had lifted sentiment to a 15-month high.

The reading is the weakest since the first quarter of 2025, when concerns over a proposed VAT increase weighed heavily on consumer sentiment.

The decline was broad-based, with all three components of the index moving lower.

The economic outlook sub-index dropped from -14 to -32, while the household financial outlook measure fell from 12 to zero.

The index tracking the suitability of the present time to purchase durable goods, including vehicles, furniture and household appliances, weakened from -21 to -24.

According to the Bureau for Economic Research (BER), surging fuel costs have added an estimated R45 billion to the South African economy during the quarter, placing significant strain on both consumers and businesses.

Petrol prices rose by 29% quarter-on-quarter, equivalent to roughly R5.60 per litre, while diesel prices surged by 57%, or around R10 per litre.

Higher-income households recorded the steepest deterioration in confidence. Sentiment among consumers earning more than R20,000 per month plunged from -4 to -28.

More than half of respondents in this income group now expect economic conditions to worsen over the next year, while expectations regarding personal finances also shifted into negative territory.

FNB Chief Economist Mamello Matikinca-Ngwenya said affluent households had been disproportionately affected by rising fuel costs, higher borrowing costs, increased airfares and weaker equity markets.

The JSE All Share Index has fallen approximately 12% from its February peak.

Middle-income consumers also became more pessimistic, with confidence falling from -7 to -19. Sentiment among lower-income households remained unchanged at -12, supported by slower food inflation and relatively modest increases in public transport costs.

The sharp decline in confidence points to weaker consumer spending in the months ahead.

While real household consumption growth remained resilient in early 2026, quarterly growth slowed markedly. Recent BER retail survey results already indicate softer demand for durable and semi-durable goods.

However, a recent memorandum of understanding between the United States and Iran has helped push oil prices lower, raising hopes that fuel costs may ease later this year and provide some relief to consumers.

– CAJ News