Rising Tariffs Drive Cost of Living

By LEBO MOKOENA

Electricity price hikes — 8.75% for Eskom customers and more than 10% for those supplied via municipalities — are adding sharply to South Africa’s cost of living.

Competition Commission economist Andiswa Sibhukwana told reporters on Wednesday that their latest report highlights food, electricity, water, debt and transport as the biggest drivers of household strain.

“Our research focused mainly on low‑income earners and those living on government grants, from the unemployed to those earning up to R20,000. We found that 83% of their income goes to food, electricity and water, rent, transport or fuel,” she said.

Electricity and Water Costs

Prepaid electricity users are hardest hit. “Prices we tracked from January 2020 to January this year show an 85% increase. Water rose by 68% in the same period. Both are far above inflation, which rose by 30%. The reasons include ageing infrastructure, debt, inefficiency and the need for investment,” Sibhukwana explained.

She added that the Commission cannot lower tariffs but aims to ensure transparency. “We educate people on what factors are considered when electricity tariffs rise. NERSA approves the increases. We hope stakeholders act on this report.”

Education and Food Prices

Chief economist Raksha Darji raised concern about rising education costs. School fees have increased by 37% at primary level and 42% at secondary level since 2020. In no‑fee schools, overcrowding and under‑investment are lowering quality.

Food prices remain stubborn at retail level even when farm prices fall. Examples from the Commission’s monitoring include:

• Six eggs cost R11.69 from farmers, but retailers charge R23.

• 1.5kg chicken portions cost R45 from suppliers, but sell for R101.56.

• 2.5kg maize meal costs R14.49 from farmers, but R18 at retailers.

Fuel Price Shock

Advocacy coordinator Sibusiso Mbothou from the Pietermaritzburg Economic Justice and Dignity Group said rising fuel prices are worsening the crisis. On Monday, the Department of Mineral Resources and Energy announced petrol would rise by R3.06 to R26.25 per litre, diesel by R7.51 to R25.90, paraffin by R11.67, and gas by R1.08 per kilogram. Finance Minister Enoch Godongwana announced a R3 cut in the fuel levy, but Mbothou said this was not enough.

“The basket of 44 essential food items we monitor costs R5,328.53 this month. A worker earning the minimum wage of R5,320.48 cannot afford it. Rising petrol and diesel will push food and transport costs even higher,” he warned.

Farmers and Transport Sector

AgriSA COO Jolanda Andrag said farmers will struggle as diesel hikes raise production costs. “Fuel increases during planting and harvesting seasons are especially harmful. Government must stabilise prices and invest in local refineries to reduce dependence on imports,” she said.

Santaco spokesperson Rebbeca Phala said taxi operators are under strain. “The fuel levy reduction will not ease costs. Associations will assess operating expenses and inform passengers, but we promise decisions will not harm commuters.”

COSATU said it will continue engaging government to protect jobs, industries and workers’ livelihoods. TQ