Petrol price hike threatens the nation’s food security

By Ashley Lechman

Petrol price increases don’t just hurt motorists who need to fill up their vehicles, they have a devastating effect on the country’s food supply.

The country’s food security is in the spotlight right now, with current weather conditions posing a large enough threat to farmers to cause a potential yield loss of their crops, following the heat waves and sparse rainfall in February, as well as the financial strain of a hike in petrol prices this week.

This would place a heavy financial burden on the nation’s farmers, at a time when they are struggling to keep their heads above water.

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

This means there is a real possibility that this could lead to South Africa’s farmers producing fewer summer grains than previously expected, which 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, the CEO of Debt Rescue, adding that petrol price increases don’t just hurt motorists who need to fill up their vehicles, they hd a devastating effect on the country’s food supply.

“Our farmers, on whom we rely for the food we put on our tables, are hit very hard financially by each hike in the price of petrol and diesel. The farming industry relies predominantly on diesel – not only to run their tractors and lorries, but also their machinery,” he said.

The Department of Mineral Resources and Energy announced a second consecutive steep jump in the price of both 93 and 95 unleaded petrol and a substantial hike in diesel prices, as of Wednesday, March 6, 2024.

Despite the small positive movement during the latter months of 2023, the March price hike will send petrol prices back over R24.00 a litre (95) and reverse much of the relief provided through price drops since November last year.

The price of unleaded petrol – both grades – will rise by R1.21 per litre, bringing 95 unleaded petrol up to R24.45, 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 for the third consecutive year.

“These levies are traditionally increased in February and implemented in April, but the minister of finance heeded calls by the Automobile Association and in his February budget speech indicated this will not happen again this year.

“Though not a saving as such, any increases would have added additional pressure to fuel prices, and we again welcome his decision not to increase these rates for 2024,” said the AA.

“The latest petrol price hike will place a heavy burden on our farmers and other role-players in the agricultural sector, potentially plunging the country into a food security crisis that will not only impact supplies, but also inevitably hit the pockets of South African citizens hard. The burning question is, can consumers survive another petrol price hike?” Roets asked.

Economists concur, saying that a steep increase in the fuel price could have a big impact on inflation.

Chief economist of the Efficient Group Dawie Roodt also said the increase comes at a time when the economy was not growing and consumers are suffering.

“The poor will be affected heavily by this. The rand is under a lot of pressure and is much weaker than it was a month ago, and this is one of the major reasons for the fuel price increase,” he explains.

“Consumers are buckling under the highest interest rates the country has seen in more than a decade, increasing levels of debt and eroding disposable incomes, while salaries cannot keep up with inflation. A real sense of hopelessness now pervades among desperate consumers who are sliding deeper and deeper into debt to keep their families afloat,” Roets pointed out.

“This is deeply concerning,“ he says. “My advice to those who cannot find their way out of the debt trap is to seek help through debt review, where a registered debt counsellor can assist you to manage your financial predicament. It is never too early to ask for help,” Roets further added.

Follow the link to read more: https://www.iol.co.za/business-report/economy/petrol-price-hike-threatens-the-nations-food-security-576b76f6-4eca-4cd4-9ec7-70718fd94eb7

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