Ongoing above-inflation increases in electricity, water prices continue to squeeze consumers - report

Households remain under strain despite the moderation in headline inflation because cost-of-living pressures in South Africa remain structurally embedded.

That's the broad conclusion reached in the second Cost of Living (CoL) Report just released by the Competition Commission.

The research looks at how prices for basic goods and services have changed since 2020, and what this means for household budgets.

According to the new report, electricity remains one of the biggest expenses for consumers, followed by water.

The numbers are staggering: From 2020 to January 2026, power prices rose by about 85% and water by around 68%, significantly above overall inflation which went up by 30% over the same period.

The Commission says the persistence of these increases reflects deeper structural challenges within the utility sector in South Africa. These include ageing infrastructure, high debt burdens, operational inefficiencies, and the need for ongoing capital investment.

As CompCom principal economist Raksha Darji points out, these are significant increases in administered prices over the five-year period which would in turn impact the cost of other necessities like food, education and healthcare.

The report finds that primary healthcare (general practitioners) costs have also risen faster than overall inflation and remain high. GP tariff increases in 2026 are expected to be broadly in line with medical inflation of about 4.2%.

When it comes to education, primary education costs rose by 37% over the last five years and secondary education became 42% more expensive, both above headline inflation.

Darji says this is largely due to increasing operational costs (including electricity and water), which are not sufficiently covered by government funding.

Scroll up to the audio player to hear more from Darji, and click here to read the full Cost of Living Report