Record fuel hike lands at midnight as farmers warn of job cuts
The Agricultural Business Chamber says 80% to 90% of South Africa's food moves by road, and a Delmas farmer says he has already had to cut labour.
Fuel prices rise at midnight on Tuesday in what eNCA reports is a record increase, and the effects are expected to run well beyond the forecourts.
According to the broadcaster, 95 unleaded is set to rise by R3,33, taking it to just over R30 a litre, while diesel goes up by R2,84. eNCA attributes the increase to the war involving the United States, Israel and Iran, which it reports has run for more than seven months and has weighed heavily on the global oil price.
The Agricultural Business Chamber of South Africa is worried about what comes next. Its chief economist, Wandile Sihlobo, said between 80% and 90% of the country’s food and agricultural products are transported by road, so increases feed straight into the cost chain and eventually reach the consumer. Fuel is also a direct farm input, and he noted that planting begins now in October in most regions.
A Delmas farmer who keeps cattle and plants maize and soybeans, Jan Boshoff, told eNCA the increase will affect everyone in the country. He said farmers are price takers, with the market and not the producer setting what they are paid, and that they cut costs wherever they can. He said he had already had to cut labour, which he described as hard to say given how many jobs agriculture provides.
The rand has also weakened over the past month, and economist Dr Azar Jammine told the broadcaster the economy will find this difficult to absorb. He said retailers could pass distribution costs on to consumers and air travel could become more expensive. He also raised the possibility that the Reserve Bank may lift the policy rate by a further 25 basis points when it meets in November, though he noted that decision is still six weeks away.
Cosatu has called on government to act to shield households. The federation’s parliamentary coordinator, Matthew Parks, said fast-tracking the second special appropriation bill would trigger funding to the Central Energy Fund’s equalisation fund and provide relief. He said Treasury and the Department of Mineral and Petroleum Resources did not take up Cosatu’s proposals, and that the federation fears inflation rising again in October, growth slowing, unemployment ticking up and a November rate increase. He argued that R10 million is significant but small against a R2,7 trillion budget, and that relief for October and November is what the federation is asking for.
The National Taxi Alliance’s Theo Male said it is too early to say whether fares will rise. He said he would not speculate ahead of a meeting with government that day, and that any decision would follow consultation with the industry collective on the cost pressures facing operators. He noted that commuters already spend more than 40% of their disposable income on public transport.
Source: eNCA (YouTube), eNCA News Bite | Record fuel hike, Feroz Khan testimony postponed and spam-call crackdown | 6 Oct. (https://www.youtube.com/watch?v=LGr0iYdzGwE)
