Fuel hike blow for farmers

The petrol price increase this week will hit the pockets of farmers the hardest.

Ordinary consumers will also feel the severe impact of the 74c/l hike in petrol and 91c/l hike in diesel, as increased transport costs will likely fuel food price inflation.

FNB Agribusiness information and marketing head Dawie Maree said both petrol and diesel were used for tillage, harvesting, machinery and transportation – making them critical components for both smallscale and commercial farmers.

Maree said the industry had already been dealt a big blow when finance minister Tito Mboweni announced an increase of about 30c/l for diesel, with effect from April 1.

“Given that 70% of SA’s food is transported by road, the increase in the diesel price will have a negative impact on food inflation, and the disposable income of consumers who are already struggling to make ends meet,” Maree said.

Adding a similar voice of concern, South African Chamber of Commerce and Industry CEO Alan Mukoki said the chamber was concerned that fuel price increases would lead to inflationary pressures on the economy.

He said the hike could lead to potential interest rate increases and an increasingly difficult environment for economic growth.

Mukoki said the chamber acknowledged the government’s attempt to lessen the blow for consumers by implementing the price hike in stages.

“However, taken over a period, the effect will still be negative,” Mukoki said.

“We urge the government to make every endeavour to trim unnecessary, wasteful and reckless expenditure with an idea to reduce the various levies on the price of fuel.

“This cost of energy input is already overtaxed.

“An economy whose energy input costs keep rising and are not commensurate with economic growth and job creation is bound to hit turbulence,” Mukoki said.