Finance

How much more you are paying for petrol and food right now compared to 5 years ago

Staff Writer

 ·2 Oct 2022

Recent data from the South African Reserve Bank (SARB) shows how much more South Africans are taking on in terms of food and petrol prices.

In its latest Quarterly Bulletin, the SARB reported that both domestic consumer and producer price inflation increased further into the second quarter of 2022, with headline consumer price inflation reaching a 13-year high in July at 7.8%.

Headline consumer price inflation breached the upper limit of 6% in May for the first time in four years.

The SARB said that the brunt of consumer price inflation was felt in regard to consumer goods price inflation: “Non-durable goods price inflation accelerated from 9.8% to 14.4% over this period as supply-side pressures related to the war in Ukraine resulted in sharp increases in fuel and food prices.”

Petrol

On the back of rising global fuel prices due to the easing of Covid-19 lockdown restrictions, supply-side constraints, and the Russian war on Ukraine, domestic prices soared this year.

According to the SARB, the price of both diesel and inland 95-octane petrol increased to record highs of R25.40 per litre and R26.74 per litre, respectively, in July, before receding somewhat in August and September 2022.

Note: Prices are taken from the Automobile Associations Fuel Pricing database that shows fuel price fluctuations. All prices are per litre.

Month-end data from the Central Energy Fund CEF for 29 September 2022 shows that the petrol price could drop by R1 per litre next week when prices are adjusted on Wednesday (5 October). Diesel, however, is showing an under-recovery – thus a potential increase of 10 cents per litre.

Fluctuations in the rand are one of the main drivers of the fuel price. Economists anticipate volatility and weakness to persist over the next few months.

Lower international oil prices have eased the pressure on petroleum products. However, it is still at the mercy of supply constraints and the global energy crisis.

Diesel, in particular, has been unfortunate in facing a possible increase as farmers, haulage vehicles and emergency power generators across the world rely on the fuel – driving up demand, limiting supply and, in turn, making it more expensive.

Food

In the months between April and July of 2022, consumer price inflation accelerated notably from 6.3% to 10.1%.

The SARB reported the following notable increases in food products compared to the year before:

• Meat prices (+9.4%)
• Bread and cereals (+13.7%)
• Oils and fats (+36.2%)

The acceleration in final manufactured producer price inflation for oils and fats to a record high of 73.0% in June 2022 was directly related to the war in Ukraine, as that country was a dominant exporter of oil seeds before the Russian invasion – such costs were carried onto the consumer.

The graph below shows how food prices have changed since 2017:

Nedbank recently reported that global food prices had moderated significantly when looking at the United Nations FOA price index that indicated global food inflation at 7.9% in august from 13% in July and a recent peak of 34% in March.

Despite this, economists have warned that the declining trend in inflation is not set in stone, and other factors are expected to slow the rate of moderation in headline inflation.

The Pietermaritzburg Economic Justice and Dignity group (PMBEJD) has been tracking select food prices making up its household basket since August 2018, which provides a look at how prices have escalated over the last few years.

While the group adjusted its basket in September 2020, certain food item quantities remained consistent in the old and new baskets. Some of the key price differences are highlighted in the table below.

Read: This is the average salary in South Africa right now