Statistics South Africa has published its latest Consumer Price Index (CPI), with annual consumer inflation easing to 4.9% in June after recording a 30-month high of 5.2% in May.
The monthly increase in the consumer price index (CPI) was 0.2% – up from 0.1% in May but lower than the 0.5% rise recorded between May and June 2020, the statistics body said.
“If annual consumer inflation is recalculated with the exclusion of food & NAB (non-alcoholic beverages) and fuel, it comes to 3.4% in June. This is well below the 4.9% headline rate, indicating that these products are important drivers of inflation,” it said.
Overall food price inflation was at 7.0% year-on-year, Stats SA noted, with transport costs up 12.3%.
Some of the largest annual price increases (June 2020 vs June 2021) were recorded for the following goods and services:
The data shows that fuel is one of the biggest contributors to inflation, increasing by 27.5% in June compared to the same month last year.
These relatively high rates come off a low base recorded during the second quarter of 2020 when fuel prices were depressed, StatsSA said.
“On a month-on-month basis, fuel prices dropped by 0.2% between May 2021 and June 2021. The price of inland 95-octane petrol edged lower by 10c a litre in the month. Diesel prices, on the other hand, increased by an average of 0.7%.
“Diesel recorded an annual increase of 25.5% in June, lagging behind petrol’s rise of 28.2%. The average price for a litre of diesel in June was R16.31 per litre”.
South African motorists are likely to pay even more for petrol in August, with data from the Central Energy Fund pointing to petrol and diesel price pain next month – even before factoring in the damage done by recent riots and looting in KwaZulu Natal and Gauteng.
The CEF data shows a large under-recovery for both petrol and diesel, with data pulled on 20 July pointing to a 78-74 cents per litre hike and a 46-47 cents per litre hike for petrol and diesel, respectively.
Impact of looting
South Africans in the major metropoles including Cape Town, Durban and Johannesburg can all expect to pay more for water, electricity and other surcharges this month as annual increases take effect.
Economists have also warned that the recent civil unrest and credit rating downgrades for major metropoles are likely to result in an increase in municipal rates and taxes.
Ratings agency Moody’s downgraded five of South Africa’s largest metropolitan municipalities this week, including Cape Town and Johannesburg, citing concerns around liquidity and finances.
As the downgrade will have a direct impact on the finances of these municipalities, this could subsequently be passed onto consumers through higher municipal rates and taxes, said Saveshen Pillay, director at Credit Ratings Analytics.
“The financial burden of this will obviously have to fall on someone, and it is obviously going to affect the revenue collection abilities.
“If you look at the National Treasury and government, the providing of additional subsidies will likely be quite difficult, so you are then left in the tricky situation of burdening your existing revenue base with higher rates and taxes to obviously cushion the impacts of the riots and looting.”