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Impact of petrol/diesel price increase on farmers

The increase in the price of petrol at 74 cents a litre and diesel around 91 cents a litre, will have a severe impact on the cash flow of farmers.
Impact of petrol/diesel price increase on farmers
©Phanuwat Nandee via 123RF

Fuel and diesel are commonly used for tillage, harvesting, machinery and transportation, making them a critical component for both small-scale and commercial farmers, as well as the entire agricultural value chain.

From a farm producer level, we are currently experiencing a late-season whereby farmers are still using a lot of diesel. This follows the Budget Speech announcement that the fuel levy will increase by 30c/litre for diesel from 1 April 2019, which adds to the woes of producers.

Furthermore, given that 70% of South Africa’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.

About Dawie Maree

Dawie Maree is Head of Information and Marketing at FNB Agribusiness.

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