Rocket‑and‑Feather Pricing: Why South Africans Pay Yesterday’s Costs

South Africa’s Competition Commission warns of rocket‑and‑feather pricing, where costs rise fast but fall slowly. From fuel to maize meal, households face stubbornly high prices despite falling input costs, eroding disposable income and consumer welfare.

By MAFIKA MNDEBELE

Temporary shocks can legitimately push prices higher. But when fuel, agricultural commodities and other input costs fall while consumer prices remain elevated, South Africans are entitled to ask a simple question: who is keeping the difference?

We are used to being told why prices must rise. Oil surges, the rand weakens, droughts or wars disrupt supply chains, electricity tariffs climb — and costs are passed on. No serious discussion about the cost of living pretends businesses can absorb increases forever.

But what happens when those costs come down? If fuel, wheat or maize prices justify increases, what happens when the pressure disappears? Do consumers receive relief with anything like the speed of the increase?

The Competition Commission’s August 2026 Cost of Living Report suggests not. It highlights rocket‑and‑feather pricing: costs rise like a rocket, but fall like a feather — slowly, incompletely, sometimes hardly at all.

For economists, this is price transmission. For ordinary households, it is survival.

Yesterday’s Fuel Crisis, Tomorrow’s Taxi Fare

Transport shows the problem clearly. Between January and July 2026, petrol inflation rose 26%, taxi fares 13%, while headline inflation was just 3.8%. Taxi operators initially absorbed costs, only raising fares after fuel stayed high. That distinction matters: they employ people, maintain vehicles, pay insurance and buy fuel.

But fares rarely adjust downwards when petrol prices decline. A war may end, a currency shock may reverse, yet commuters keep paying crisis‑level fares. For workers travelling daily from townships or rural areas, this is not a minor anomaly. It is a permanent cut in disposable income.

Follow the Maize from Farm to Table

The same question arises in food. Maize meal is a staple, not a luxury. In 2026, maize seed prices fell continuously with a record harvest. Yet producer prices for maize meal did not follow. Spreads reached unprecedented highs, unexplained by fuel costs alone.

Retailers showed some movement: average maize meal prices dipped from R41.90 in January to R39.79 in June. But consumers may not be receiving the full benefit. Where between farm and dinner table does the saving disappear?

Bread and cooking oil show this is bigger than maize. The farm‑to‑producer spread for brown bread climbed to 79%, its highest since 2023. Sunflower seed prices fell, but producer oil prices rose. Higher fuel costs explain part of it, but widening margins deserve scrutiny.

Poor Households Experience Inflation Differently

For the poorest households, 40.7% of spending goes to food, 26.1% to housing and utilities. Two categories consume nearly 67% of expenditure. Rising prices mean something very different here. Wealthier families can cut holidays or entertainment. Poor households cannot postpone eating, travelling to work, or paying for electricity and water.

That is why competition policy is not just technical economics. It is social policy. A few rand retained in the price of bread or transport may seem small, but multiplied across millions of households, month after month, it erodes purchasing power dramatically.

A Consumer‑Protection Test for Essentials

Headline inflation tells us what happened to prices, not why. We need better questions: when maize rises, how quickly does maize meal respond? When fuel falls, how many increases are reversed?

South Africa needs systematic monitoring of price transmission for essentials — maize meal, bread, cooking oil, proteins, transport. This is not price control. It is transparency. Authorities should publish data, scrutinise abnormal spreads, and act decisively where anti‑competitive conduct is found.

Consumers Cannot Keep Paying for Yesterday’s Crisis

The Commission’s report forces us to ask: who benefits when costs fall? If maize prices drop but households see little relief, why? If sunflower seed prices fall while oil rises, why? If petrol declines but fares remain high, why?

Where explanations are legitimate, they should withstand scrutiny. Where not, institutions must intervene. A temporary crisis may justify a temporary increase. But it cannot become a permanent licence to charge yesterday’s price.

This is not hostility to business. South Africa needs investment, entrepreneurs and profitable companies. But genuine competition protects good businesses too. It rewards efficiency and innovation, not margins sustained by lack of alternatives.

The objective is not to punish business, but to ensure markets work in both directions. When costs rise, businesses adjust. When costs fall, consumers must benefit. TQ

Mafika Damane Mndebele is a young South African politician from KwaZulu‑Natal, representing the African National Congress (ANC) in the provincial legislature since 2024. He is known for his work in economic development, transport, and rural affairs. The Quest welcomes and publishes contributions from leaders from different sectors in South Africa and abroad.