In the past decade, administered prices have increased enormously more than general inflation, the Reserve Bank told Parliament.
Electricity prices are up 177% over the past 10 years, while municipal rates and taxes have increased by 118%.
That compares to headline CPI of 68%.
But the stand-out price increase is in water, which now costs 213% more than at the beginning of 2010.
Administered prices – those dictated by the government – “continue to be higher” than general inflation, the South African Reserve Bank has told Parliament, in somewhat understated fashion.
Over the past decade, the bank says, the increase in the headline consumer price index (CPI) has totalled 68%, so that a basket of goods that cost R100 at the beginning of 2010 will now require R168 to buy.
Over the same period of time, municipal rates and taxes have increased by 118% – which means it now costs R2,180 to settle a rates and taxes bill worth R1,000 ten years ago.
The price of electricity has increased by 177%, which translates to R500 worth of electricity in the run-up to the soccer World Cup in South Africa now costing R1,385.
But those increases are well below the change in an even more fundamental requirement: water. Since the beginning of 2010, the Reserve Bank told Parliament’s standing committee on finance, the price of water in South Africa has increased by 213%.
That means an average South African who spent R400 on water per month at the start of 2010 now has to spend R1,252 to buy the same amount of water.
Assuming that hypothetical consumer saw their income keep track with headline CPI (which is often used as a baseline for salary increases), and had to keep the proportion of their income spent on water the same, they will have had to reduce their water consumption by more than half to keep up with the price increases.
Source: Business Insider South Africa