South Africans might not quite understand why we keep hearing that inflation is coming down while their wallets and households’ budgets keep shrinking. Well, on paper, that sounds like progress. But for many households, it does not feel like an economic relief.
Prices are still high and still rising. When the basics are already unaffordable, slower increases offer very little comfort.
This gap between the numbers and everyday experience is at the centre of the Competition Commission’s second Cost of Living Report (COL). Using publicly available Stats SA data, our second instalment of the COL tracks the price of essentials from 2020 to January 2026 and asks a simple question: if conditions are improving, why are so many households still under financial strain?
The answer begins with unavoidable costs. Electricity and water have risen far faster than inflation. Since 2020, electricity prices are up by about 85% and water by around 68%, compared with overall inflation of roughly 30%. These are services people cannot cut out, which means households have little room to adjust when prices climb.
Recent increases add to the pressure. Eskom tariffs increased again at the beginning of April, with municipal hikes expected from the 1st of July. For the low-income households and small businesses alike, these costs feed into everything else, from food production to daily services, keeping prices elevated across the economy.
The strain extends beyond utilities. Education and healthcare, both essential to household wellbeing, have also outpaced inflation. Since 2020, primary education costs have increased by 37% and secondary by 42%. Healthcare costs continue to rise, placing further pressure on already stretched budgets. Families are left making difficult trade-offs, often delaying or cutting back on critical needs.
Transport is another key pressure point. When fuel prices increase, the effects are immediate. Taxi fares rise, delivery costs go up, and food prices soon follow. A few weeks ago, the Commission cautioned against price hikes based on anticipated fuel increases, stressing that adjustments should reflect actual costs and should fall when those costs decline.
However, prices do not always move in both directions with the same speed. The report highlights the “rocket and feather” effect, where prices rise quickly when costs increase but fall slowly when costs ease. This pattern is evident in everyday items such as eggs, frozen chicken, maize meal and cooking oil. Even where input costs have stabilised or declined, retail prices often remain high.
This gap between producer and retail prices matters. It points to how cost pressures are passed through the value chain and raises questions about who benefits when input costs drop but consumer prices do not.
The Commission has warned that without greater scrutiny of how essential prices are set and transmitted, these pressures will persist. The problem is not temporary; it is embedded in how key markets function.
The report is more than a snapshot of rising costs. It is a tool for transparency and accountability. It equips communities to question tariff increases, demand transparency in pricing, and push for stronger consumer protection. It also signals to businesses and regulators that pricing behaviour will be under closer scrutiny.
The cost-of-living epidemic is not abstract. It is felt in daily decisions about what to pay, what to delay and what to go without. This report may not lower prices, but it does make the sources of our economic pressures clearer. That clarity is essential, because meaningful change begins with understanding where the burden lies and who carries it.
- Makunga is spokesperson for the Competition Commission of SA
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