Johannesburg – The price of fuel has surged more than 35% over the past year, data from Statistics South Africa shows.
This is annual headline inflation climbed above the 4,5% midpoint of the South African Reserve Bank’s monetary policy target range, accelerating to 5,2% in May – the highest reading since November 2018 when the rate was also 5,2%.
“The 5,2% annual change in May comes off a low base recorded in May 2020, when fuel prices were low. Core inflation (this is consumer price inflation (CPI) excluding food & non-alcoholic beverages, fuel and energy) was 3,1% in May 2021, much lower than the headline rate. This hints at the notable impact that fuel and food inflation has had on overall (headline) inflation levels,” the Stats agency said in a statement.
“Despite a small monthly drop in the fuel price in May, the annual increase quickened to 37,4% from 21,4% in April. Petrol prices were 41,8% higher in May compared with the same month the previous year, while diesel was 27,0% more expensive.”
FNB Economist, Koketso Mano, said: “Fuel inflation is decelerating on a monthly basis. Even as oil prices have continued to climb on improving demand and tighter stocks, the stronger rand supported lower local fuel prices in May.”
Johann van Tonder, Economist at Momentum, said looking two to three months ahead, headline CPI will in July and August, when Stats SA surveys municipal rate increases, receive upward pressure from this source.
“Electricity tariffs are due to increase by14.6% in all municipalities except for Cape Town that decided to subside part of the increase. Water and sanitation rate increases will range between 5.0% and 10.0% and that of property and refuse removal rates between 2.0% and 6.0%. Should these increases be representative of all municipalities, municipal rate increases may contribute an additional 0.2 percentage points to headline CPI.”
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