EconoView – October 2022

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By Daniël Minnaar


The annual consumer price inflation slowed down to 7,5% from 7,6% in August. After peaking at a 13-point high of 7,8% in July, the inflation rate seemed to have reached a turning point. The rate for September, however, was still above the Reserve Bank’s target range of between 3% and 6%. This was also the 17th consecutive month in which the inflation rate was higher than the median (4,5%) of the target range.

The inflation rate was again driven largely by the categories food and non-alcoholic beverages, and transport.
Consumer prices of food and non-alcoholic beverages increased in September by 11,9% year on year and contributed 2 percentage points to the inflation rate of 7,5%. This category was largely driven by Bread and Grains (3,6 percentage points), followed by Meat (3,1 percentage points), and Milk, Eggs and Cheese (1,3 percentage points).

Prices in the category transport increased by 17,9% year on year in September and contributed 2,5 percentage points to the overall rate. Although transport remains high, the rate at which the category increased has also slowed down. In August and July, the price of this category increased year on year by 25% and 21,2%, respectively. Within this category, the price of fuel increased by 34,1% and public transport by 22,1% on a year-on-year basis.


Fuel prices in South Africa are expected to increase next week due to the rand being under pressure and oil prices remaining high. The Central Energy Fund’s latest figures (24 October) are indicative of a possible increase of 56 cents per litre for petrol and approximately R1,61 per litre for diesel.

Concern was also expressed this week regarding a serious risk of fuel shortages in the country due to disruptions in the fuel supply chain. This concern was expressed in the wake of the recent Transnet strikes. Although Transnet workers resumed their duties on Friday, 21 October, the strikes had created an enormous backlog in the port and transport networks. While it may take months to address the immediate backlog, the supply of refined fuel will pose a risk to the country’s fuel stock levels. A possible fuel crisis had loomed even before the strikes started, with airports recently warning airlines against fuel rationing. Eskom also expressed concern over its ability to acquire sufficient diesel for its power generators. Before the strikes, the disruptions in the supply of refined fuel were largely due to the shortage of refinery capacity.

With two oil refineries in Durban, Sapref and Genref, which recently closed, only Natref in Sasolburg is currently operational. Sasol’s synthetic fuel activities, which are coal driven, are also operational but are responsible for only a small portion of South Africa’s capacity.For this reason, South Africa will have to rely on refined fuel imports in the foreseeable future until sufficient refinery capacity has been created.