South Africa's workers lose ~40% purchasing power as inflation and fuel prices surge

Analysis by Paymenow shows that South African employees have lost just over 40% of real purchasing power over the past decade as electricity, fuel and utility costs have risen sharply—electricity tariffs up 132%, diesel 132% and petrol 86%—while average wages grew only 61.2%. The cost pressure means workers spend between 35% and 50% of disposable income on transport, fuel and utilities, and employers are grappling with higher wage demands, absenteeism and reduced productivity.

In April, South Africa’s headline consumer inflation accelerated to 4% year‑on‑year, driven by steep fuel price hikes—petrol rose R3.27 per litre and diesel R6.19 per litre, pushing diesel above R32 per litre. Temporary fuel levy relief ends in July, heightening the risk of further price spikes as global energy costs remain high. The surge is influencing logistics costs and prompting a shift toward electric vehicles, while the Reserve Bank may consider a policy rate hike at its May 28 meeting.