Fuel price hike, heat blow to farmers

The large fuel price increase as well as the hot weather and little rain in February threatens South Africa’s food security and current weather conditions pose a large enough threat to cause a potential crop yield loss.

This could place a heavy financial burden on the nation’s farmers as they struggle to keep going.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said weather conditions in various areas, where significant summer grains such as maize, sunflowers and soya beans are in the pollination stages are not the best as they should ideally have higher moisture levels during this stage to boost yields.

This means there is a real possibility of farmers producing fewer summer grains than previously expected and that poses a threat to the country’s food production. Rainfall over the next few weeks is crucial to ensuring a better agricultural harvest.

“This is not the time to announce another steep hike in the petrol price,” warned Neil Roets, CEO of Debt Rescue. “Our farmers, whom we rely on for the food we put on our tables, are hit very hard financially by each hike in the price of fuel. The farming industry relies predominantly on diesel, not only to run their tractors and lorries but also their machinery.”

The department of mineral resources and energy announced a second consecutive steep jump in the price of petrol and a substantial hike in diesel prices on Monday.

Despite the small positive movement during the last months of 2023, the March price hike will send petrol prices back over R24 a litre for 95 unleaded petrol and reverse much of the relief provided through price drops since November 2023.

The price of unleaded petrol will increase by R1.21 per litre, bringing 95 unleaded petrol up to R24.45 per litre, while 93 unleaded will reach R24.13 per litre. Diesel will increase by between R1.05 and R1.19 per litre.

The only good news for consumers is that the two main levies on fuel, the general fuel levy and the Road Accident Fund levy, will not increase. “The minister of finance heeded calls by the Automobile Association and in his February budget speech and indicated this will not happen again this year.”