<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
JIMMY MOYAHA: In light of what\u2019s recently been happening in the fuel world and with the expected fuel price increases that are set to take effect this week, we\u2019re taking a look at what some of the companies locally have noted, particularly Discovery Insure which has seen a 35% decrease in fuel spend. Clearly, consumers are under pressure and looking to make alternative arrangements.<\/p>\n
Read:
Fuel tax protest averted (for now)
Fuel loyalty race intensifies as motorists chase every cent
Diesel surges to R32\/l in historic price reset<\/p>\n
I\u2019m joined on the line by the chief executive of Discovery Insure, Robert Attwell, to take a look at this and see what to make of it. Rob, lovely having you on the show. Thanks so much for taking the time.<\/p>\n
Consumers clearly are feeling the pressure \u2013 and are set to feel it only more come Wednesday.<\/p>\n
ROBERT ATTWELL: Yes, Jimmy. Good evening and evening to your listeners.<\/p>\n
Yes, I think the behaviour of consumers has been really, really remarkable. It\u2019s just a reminder that when things shift economically and things affect our pockets; consumers make different plans and change their behaviour immediately.<\/p>\n
I think we\u2019re in a privileged position. We have over 200\u00a0000 clients where we\u2019ve been able to analyse their fuel reward swipes at BP and Shell to understand how they\u2019ve changed their behaviour since the fuel price increase last month.<\/p>\n
JIMMY MOYAHA: Rob, I\u2019m guessing part of those patterns that you\u2019re starting to see are perhaps individuals making different decisions around their rewards \u2013 maybe claiming or redeeming their rewards rather than deferring them and saving them. Everybody needs all the help they can get, and obviously some of that data will start to come in more slowly, because this is really only the first significant month of this increase.\u00a0Clearly the decisions and the patterns that consumers are making show an effort to save every single cent they can.<\/p>\n
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ROBERT ATTWELL: Yes, most certainly, and we see that in the data. We normally see a massive spike in the number of fuel transactions [with] a price increase, but we\u2019ve seen nothing like we have for this past increase.<\/p>\n
To give you a sense, we saw fuel transactions doubling on the 30th and 31st of March, with South Africans really bracing for the impact of the April increase, which I guess has been fairly anomalous.<\/p>\n
The increase has been, I think, much larger than we\u2019ve ever seen.<\/p>\n
But critically what we are seeing what\u2019s really interesting in telematics data is that consumers are choosing to drive less.<\/p>\n
We\u2019ve seen, compared to previous Aprils, and normalising for Easter and long weekends, a 10% reduction in kilometres driven by consumers.<\/p>\n
It just speaks to consumers making a savvy choice, saying if I can be flexible, if I can share a ride, or can stay at home or maybe work remotely, I\u2019m going to choose to do so.<\/p>\n
JIMMY MOYAHA: Rob, let\u2019s take a look at what companies like Discovery Insure are doing. We know that the partnerships with the filling stations to reduce or to give back more rewards have been beneficial for consumers, and this is starting to really pay off in what consumers are able to claw back and recoup from a fuel spend perspective.<\/p>\n
Are there plans \u2013 at least from Discovery\u2019s perspective \u2013 to say perhaps there\u2019s more relief we can provide? Perhaps there are other areas. We know that the government is providing fuel levy relief, but that is only temporary, and we could realistically be stuck with this burden for quite some time.<\/p>\n
ROBERT ATTWELL: Yes, that\u2019s exactly it. Jimmy, our model is built around this concept of shared value, where we incentivise our clients to drive well. And then through loss-ratio savings, we reward our clients.<\/p>\n
The bulk of these rewards is through fuel cashbacks to our clients. They earn up to 50% of their fuel spend back at our partners BP and Shell.<\/p>\n
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It\u2019s really simple. When the fuel price increases, the rewards naturally increase. And, more than that, when consumers drive well, the reward percentages increase.<\/p>\n
So from our side I think what really works well is when consumers are changing their driving behaviour they become better drivers and ultimately they hedge themselves against this higher fuel increase \u2013 which I think is critical in terms of sustainable partnerships.<\/p>\n
JIMMY MOYAHA: Rob, are you concerned about any of the potential impacts or fallouts of these sustained elevated fuel prices \u2013 things around consumers perhaps starting to make different decisions around their vehicles? Obviously, as you said, driving better and perhaps picking more fuel-efficient cars works out to the benefit of consumers in the long term.\u00a0But are you concerned at any point that we will start to get to a point where the increases in fuel prices are so significant that consumers have very little relief that they can get?<\/p>\n
ROBERT ATTWELL: Yes, Jimmy. I think the changes in behaviour we\u2019ve seen are definitely short term and potentially not sustainable.<\/p>\n
I\u2019m not sure all of corporate South Africa would allow this flexible working situation for very long.<\/p>\n
And that\u2019s it \u2013 I think the impact on consumers is really, really significant and everyone needs to do what they can to make sure that we provide relief and we provide flexibility, so that consumers can manage their spend pockets \u2013 at least until salary increases or any sort of annual changes to remuneration come through.<\/p>\n
But ultimately we need to hold out as long as possible, because I think we\u2019re in for a long ride.<\/p>\n
JIMMY MOYAHA: It certainly is going to be a long ride and there is very little we can do about it as consumers, given that we are still a net importer of refined fuels. We\u2019ll see if there is any relief on the horizon for South African consumers ahead of Wednesday\u2019s petrol price increase.<\/p>\n
For now, we\u2019ll leave the conversation on that note. Robert Attwell, chief executive officer at Discovery Insure, has been taking us through some of the trends that they\u2019ve noted on the consumer side as to how customers are responding to these fuel price increases.<\/p>\n
#Drivers #pump #brakes #Fuel #spend #drops #price #shock<\/p>\n","protected":false},"excerpt":{"rendered":"
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