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VIEWPOINT-The Fuel Price: South Africa’s Biggest Inflation Culprit and a Heavy Burden on Farmers

VIEWPOINT-The Fuel Price: South Africa’s Biggest Inflation Culprit and a Heavy Burden on Farmers

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The fuel price remains the single biggest driver of inflation in South Africa. Every time it rises, the cost of almost everything else follows. Yet when fuel prices drop, very few businesses pass those savings on to consumers. This one-way system continues to squeeze the wallets of ordinary South Africans and is particularly damaging to the agricultural sector.Farmers are true price takers. They have no control over what they pay for inputs, but they often struggle to pass those increased costs on to the market.
When fuel goes up, transport costs rise, fertiliser and chemical prices increase, and the cost of running tractors, harvesters, and delivery trucks climbs sharply. These extra expenses quickly eat into already thin profit margins.For grain farmers, higher diesel prices directly push up the cost of planting, spraying, and harvesting. livestock farmers, the cost of moving animals and feed becomes more expensive. For fruit and vegetable producers, refrigerated transport — which is highly fuel-dependent — becomes significantly costlier, affecting both local and export markets.
The problem is made worse by the fact that many companies and service providers immediately raise their prices when fuel increases, often using it as a convenient excuse to improve their own margins. However, when fuel prices fall, that same enthusiasm for price reductions is rarely seen. This creates a permanent upward pressure on costs that farmers cannot escape.
Many farmers have reported that input costs have risen so sharply in recent years that they are forced to reconsider what they plant, how much they plant, or whether they can afford to plant at all in marginal seasons. Some are already cutting back on certain operations or delaying machinery upgrades simply because the fuel component makes everything more expensive.It is time for greater transparency and accountability. South African farmers work extremely hard under difficult conditions — droughts, disease outbreaks, and rising input costs — only to see a large part of their effort eroded by a fuel pricing system that seems designed to extract more from them every year.
Government and the Reserve Bank need to find better ways to manage inflation without making fuel the default tax on productivity. Until then, the hardworking men and women on the land will continue to carry a disproportionate share of the national cost burden.The fuel price is not just a motoring issue. For South African agriculture, it is a make-or-break factor that influences planting decisions, profitability, food prices, and ultimately the sustainability of rural economies.
It’s time we exposed the companies that raise their prices when fuel prices go up, but refuse to bring them down when fuel prices fall. Ordinary South Africans are paying for this. Meanwhile, the Reserve Bank is quick to raise interest rates and destroy the wealth of South Africa.
South Africa may move away from its once-a-month fuel price changes and switch to updates every two weeks, to better handle big swings in global oil prices.The idea came up in Parliament after some of the sharpest fuel hikes in recent years.  Another bad idea.

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