Drink and diesel: The Budget Speech and consumer inflation

Drink and diesel: The Budget Speech and consumer inflation

If you drive a car or enjoy a regular glass of wine, February’s National Budget Speech would have had an impact on your cost of living. The rise in sin taxes and petrol levies announced during the speech influenced prices for alcoholic beverages and petrol, contributing to April’s overall inflation rate of 4,5%.

The Minister of Finance, during the Budget Speech, increased excise duties on various alcoholic beverages, including beer (by 15,5 cents per quart), wine (by 15 cents per bottle), sparkling wine (by 48 cents per bottle), and whisky (by R3,77 per bottle)1.

These continue to have an impact on price changes. Alcoholic beverages rose by 9,7% in April 2015 compared with April 2014, according to Stats SA’s latest consumer price index (CPI) release. Beer prices increased the most, rising 11,7% over the same period, followed by spirits (+8,6%) and wine (+4,1%).

Beer drinkers take note! A cursory look at how alcoholic beverage prices have changed over time shows that beer prices are rising at an increasing rate. Annual beer inflation rose from 4,6% in August 2014 to 11,7% in April 2015. Wine inflation, on the other hand, has remained relatively stable.figure1

Petrol prices were heavily influenced by the Budget Speech. Both the fuel and Road Accident Fund levies were increased by 30,5 cents a litre and 50,0 cents a litre respectively. These increases, which came into effect on 1 April 2015, contributed to the 14,3% rise in the petrol index in April 2015 compared with March 2015.


The higher petrol price was the main reason for the month-on-month rise of 0,9% in the overall consumer price index in April.

Key results from the April 2015 CPI release:

  • Headline CPI annual inflation rate in April 2015 was 4,5%. This rate was 0,5% of a percentage point higher than the corresponding annual rate of 4,0% in March 2015.
  • On average, prices increased by 0,9% between March 2015 and April 2015.
  • The food and non-alcoholic beverages index increased by 0,5% between March 2015 and April 2015.
  • The transport index increased by 4,5% between March 2015 and April 2015.

Download the complete CPI statistical release here.

1 Click here for a full transcript of the 2015 National Budget Speech.