The cost of keeping the lights on, getting to work and putting food on the table is rising faster than headline inflation, putting further pressure on already stretched household budgets.
Households are facing another difficult period as the prices of several essential goods and services continue to rise at a faster rate than overall inflation, with electricity, water, petrol, public transport, healthcare and some basic food products among the costs putting the greatest pressure on consumers.
The Competition Commission‘s latest Cost of Living Report, released on September 4, shows just how different the cost increases experienced by households can be from the headline inflation figure reported each month. While headline inflation stood at 4.3% in July, electricity prices increased by 8.1% and water prices by 10.1% between July 2025 and July 2026.
For households already working carefully around payday, the difference is more than a statistic. A higher electricity bill can mean less money for groceries, while rising water charges add another unavoidable expense to a monthly budget that may already include higher transport, school and healthcare costs.
The pressure is particularly severe for lower-income households, which spend a much larger share of their income on basic necessities. The Commission found that households in the lowest income decile spend 40.71% of their expenditure on food and non-alcoholic beverages, while housing and utilities account for a further 26.1%. Combined, these two categories account for almost 67% of spending, leaving considerably less room for savings, emergencies or discretionary purchases.
Transport is adding to that pressure. Petrol prices increased by 26% between January and July this year, while minibus taxi fares rose by 13%. The increase affects not only motorists filling up their cars but also commuters who depend on taxis to get to work, school, shops and other essential destinations.
Higher fuel prices can also have a knock-on effect across the economy because fuel is an important cost in moving goods from producers and manufacturers to retailers. When transport and logistics become more expensive, some of those costs can eventually be reflected in the prices consumers pay at supermarkets and other shops.
The impact of fuel prices has therefore extended beyond the forecourt, with the latest cost-of-living findings raising concerns about how quickly prices fall when underlying costs decline. The Competition Commission has highlighted evidence of “rocket and feather” pricing, where prices can rise rapidly when input costs increase but take longer to come down when those costs fall.
Food remains one of the biggest concerns because consumers have limited ability to avoid buying essential products. The Commission’s report points to products including brown bread, maize meal and sunflower oil, where producer prices have remained elevated despite declines in some underlying commodity prices. It also highlighted frozen chicken and canned pilchards, where retail prices have remained high despite stable or declining producer prices.
For consumers, this can make the weekly grocery shop particularly frustrating. A fall in the price of a commodity does not necessarily translate immediately into a cheaper product on the supermarket shelf, leaving households to absorb the difference while waiting for lower costs to filter through the supply chain.
The cost of education and healthcare is adding another layer to the pressure. Public primary school fees increased by 6% between 2025 and 2026, while secondary school fees rose by 5.7%. Over six years, public primary school fees increased by 46% and secondary school fees by 51%, according to the report. General practitioner consultation fees also increased, with cumulative GP inflation reaching about 38% by July 2026.
Water costs are another area where households can see significant differences depending on where they live. For the 2026/27 financial year, Johannesburg increased water tariffs by 12.5%, Ekurhuleni by 11%, Tshwane by 10% and Cape Town by 4.5%. The Commission also found substantial differences in the cost of water between municipalities, with the tariff for a household using 30 kilolitres a month ranging from about R722.50 in Polokwane to R1,481.84 in Ekurhuleni.
These figures help explain why consumers can continue to feel squeezed even when inflation appears to be under control. Inflation is calculated using a broad basket of goods and services, but households do not all spend their money in the same way. Someone who spends a large portion of their income on food, electricity, water and transport will feel increases in those categories much more sharply than someone with higher disposable income.
For a family living close to the edge of its monthly budget, there is also a limit to how much spending can be reduced. A household can postpone buying clothes, furniture or electronics, but cutting back on electricity, transport, food, school expenses or healthcare is far more difficult.
This is what makes the latest cost-of-living figures particularly important. The pressure facing households is not necessarily coming from one dramatic price increase, but from several essential expenses becoming more expensive at the same time. A higher electricity bill, a more expensive taxi trip, a larger grocery bill and increased school or medical costs can quickly consume money that would otherwise have gone towards savings or dealing with unexpected expenses.
The Competition Commission says it will continue monitoring essential markets and examining areas where prices remain high despite changes in underlying costs. It has also called for greater transparency and consistency in tariff-setting, stronger oversight, infrastructure investment and improved operational efficiency to help ensure that increases in essential services are justified and remain affordable.
For households, however, the issue is ultimately much simpler. What matters is not only whether inflation is rising or falling, but how much money is left after the bills that cannot be avoided have been paid. With electricity, water, transport, food and other essentials continuing to put pressure on household budgets, the latest figures suggest that the cost-of-living squeeze is far from over.
