The Department of Correctional Services (DCS) has defended paying R726.57 for cooking oil after Parliament flagged what appeared to be highly inflated food prices within the department’s procurement system.
The department said the amount referred to a 25-litre container of cooking oil and not a single litre, adding that the confusion resulted from a capturing error.
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The controversy emerged after Parliament’s Portfolio Committee on Correctional Services revealed that the state had been paying significantly inflated prices for several food items supplied to correctional facilities.
Parliament Raises Concerns Over Inflated Food Prices
According to the committee, DCS paid R3,735.32 for gravy powder that ordinarily costs around R920 in bulk, while cooking oil was initially listed at R726.57 per litre despite an estimated retail value of R29.06.
The committee said newly negotiated prices would reduce the cooking oil cost to between R26 and R29 for the same quantity.
It also revealed that the department would save between R2,815 and R2,538 on gravy powder under revised agreements.
The figures surfaced during a recent committee meeting where officials were questioned about a controversial five-year food supply contract.
DCS Says Procurement System Previously Had Major Weaknesses
DCS spokesperson Singabakho Nxumalo said the issue centred on Contract H04/2023, which was concluded with 115 service providers responsible for supplying 66 perishable and non-perishable food items across the department’s six regions.
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The contract runs from 1 April 2025 until 31 March 2030.
“It provides for a negotiated pricing model under which prices remain fixed for the first six months from the date of signature and are thereafter subject to review at six-month intervals,” Nxumalo said.
He explained that prior to the contract, food procurement was fragmented across regions, with some areas relying heavily on quotation-based procurement systems.
According to Nxumalo, this resulted in recurring awards to the same suppliers, inconsistent pricing and reduced value for public funds.
“It also exposed systemic weaknesses that contributed to irregular expenditure of R36.9 million in 2022/23 and R194.7 million in 2023/24, as identified by the Auditor-General of South Africa,” he said.
DCS Says Cooking Oil Price Was Misinterpreted
Nxumalo said the department introduced a national procurement framework aimed at standardising pricing and improving transparency.
He added that the current review process began in May 2025 after internal monitoring identified pricing discrepancies.
According to Nxumalo, National Commissioner Makgothi Thobakgale received regular oversight reports and the contract was discussed weekly by the National Operations Committee.
Following concerns over pricing, the Minister of Correctional Services also convened briefing meetings in May and June 2025.
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Nxumalo said a directive was issued on 13 May 2025 instructing regions to suspend transactions involving higher-priced items pending review.
“The Department further clarifies that the cooking oil prices reflected as R726.57 and R697.51 relate to 25-litre containers, not single litres as incorrectly interpreted due to a capturing error,” he said.
“These prices were, in fact, the result of successful downward negotiations and represent justifiable market-related pricing for the specified quantity.”
He added that the department renegotiated prices with suppliers using direct market-price benchmarking rather than Consumer Price Index or Producer Price Index formulas.
Parliament Says Original Prices Should Never Have Been Approved
Despite the revised prices, Parliament’s Portfolio Committee on Correctional Services said the original figures should never have passed procurement controls.
Committee chairperson Kgomotso Anthea Ramolobeng said the reductions should not be viewed as a success story.
“The concern is not necessarily the reductions achieved afterwards, but how such inflated figures were initially accepted,” she said.
“We should be cautious not to celebrate the correction of failures as achievements. If one litre of oil was initially quoted at an amount far above the ordinary market value, reducing that price later cannot be framed as prudent financial management.”
“Instead, it exposes weaknesses in supply chain management systems and processes,” Ramolobeng added.
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