South Africa Producer Price Inflation Hits 6.2% as Fuel Costs Surge
Key Facts
South Africa’s producer price inflation for manufactured final goods rose to 6.2% year on year in September 2026, from 5.0% in August, according to data from Statistics South Africa. The producer price index increased 1.0% month on month, indicating a rise in the overall price level of these goods compared with the previous month. The annual reading was above the market forecast of 5.7%, although below Trading Economics’ estimate of 6.5%. The index measures prices of manufactured final goods at the factory gate, while its reading differs from consumer prices, which include later stages of the sales chain. The significance of September’s data lies in the contribution of an energy- and chemicals-related group to most of the annual inflation rate recorded.
The coal and petroleum products group posted an annual increase of 32.9% in September, compared with 20.9% in August, according to price data cited by Trading Economics. Diesel prices at the factory gate rose 51.8% year on year, after an increase of 31.9% in the previous month. Petrol prices also rose 28.2% annually, compared with 20.9% in August. The comparison shows an acceleration in annual increases for both diesel and petrol between the two readings. Business Day’s coverage cited war-related disruption to oil supplies as context for fuel prices, while Statistics South Africa did not directly attribute the increase in its official data to the conflict or disruption to transit through the Strait of Hormuz.
In a breakdown of components, the coke, petroleum products, chemicals, rubber and plastics group rose 4.2% month on month and 19.1% compared with September last year, according to Rand Desk. The group contributed 4.1 percentage points to the annual inflation rate of 6.2%, making it the largest component of the overall reading. This contribution does not mean that all goods groups recorded the same pace, as rates of increase vary across the index’s components. Excluding petroleum products, prices of manufactured final goods rose 2.9% annually. Month on month, prices in this measure excluding petroleum products fell 0.2%, in contrast with the 1.0% increase in the overall index during September.
The picture extended to other indicators, though they did not all record a similar acceleration. Inflation in intermediate manufactured goods slowed to 7.8% annually in September from 8.8% in August, with a monthly increase of 0.1%, according to Rand Desk. In mining, producer prices rose 2.9% month on month, while the annual rate remained at 7.3%, the same level recorded in August. Thus, accelerating inflation in manufactured final goods coincided with a slower annual rate for intermediate goods and an unchanged annual rate for mining. These readings more clearly define how widely the increase spread across sectors, with the fuel and related products group remaining the largest driver of the final index.
The producer figures come as the South African Reserve Bank had pointed to a renewed intensification of the fuel shock. In its September statement, the bank said headline inflation was likely to exceed 5% later in 2026 and in early 2027, before slowing as the fuel shock recedes. At the same meeting, the bank unanimously raised its policy rate by 25 basis points to 7.25%, effective 25 September. The bank’s statement links the projected inflation path to the evolution of the fuel shock, while the monetary policy framework targets a return of inflation to 3% as the shock’s effects fade. The bank expects inflation to return to 3% near the end of 2027, according to its estimates in the statement.
In the foreign exchange market, the rand stood at 16.6450 against the dollar at 13:55 GMT on 29 October, down about 0.3% from the previous close, according to Reuters via MarketScreener. Reuters’ coverage linked pressure on the currency to declines in gold and platinum and accelerating producer price inflation. This is a later reading dated 29 October, not an exchange-rate change recorded in the September index release itself. Statistics South Africa is scheduled to publish the October producer price index on 26 November 2026. The next reading will provide an update on factory-gate prices after figures showed accelerating final inflation in September.