MegaBanner-Right

MegaBanner-Left

LeaderBoad-Right

LeaderBoard-Left

Home » Industry News » ‘Monster’ fuel hike potentially disastrous for agricultural sector

‘Monster’ fuel hike potentially disastrous for agricultural sector

Extreme price increases could push marginal businesses, including farms, to financial breaking point and have a massive negative impact on consumer pricing.

Mid-month unaudited data from the Central Energy Fund (CEF) is predicting the biggest fuel price hike in South Africa’s history by some margin. This is according to the Automobile Association (AA), which has monitored the fuel price data from September 1 to date, reports George Herald.

“A spike in international oil prices and a huge swing in the rand to US dollar exchange rate have combined to make us predict a knockout blow at the pumps at the end of September,” the AA says.

“Based on current data, petrol users will be paying R1.12 more per litre, with illuminating paraffin costing R1.17 more,” the association warned.

But it is diesel users who will be hit hardest, with a possible price hike of R1.38 per litre, pushing diesel to within a whisker of R16 per litre.

To put this in perspective; should this increase materialise, it will push the price of 93 unleaded octane fuel inland close to R17 a litre, off a January price of R14.20 – a total increase of around 20%, year-to-date.

The association also pointed out that a massive hike in the diesel price would be especially catastrophic for the agricultural sector which was already reeling from a prolonged drought. It said that extreme fuel price hikes could push marginal businesses, including farms, to financial breaking point, and have a massive negative impact on consumer pricing.

The AA said: “While we earnestly hope the picture improves before month end, we once again call on the government to urgently address the policy and structural issues which have put fuel users in the front line of the rand’s weakness.”


Source:

The Citizen

To enquire about Cape Business News' digital marketing options please contact sales@cbn.co.za

Related articles

BPO sector created 8 000 jobs and injected R2,8-billion into Cape Town’s economy in 2023

By Larry Claasen THE Business Processing Sector created almost 8 000 jobs and injected R2,8-billion into Cape Town’s economy in 2023, according to the Invest...

Economy recovering from a low base, says FNB

Following the South African Reserve Bank’s decision to keep interest rates at their previous level, FNB confirms that it will hold its prime lending...

MUST READ

Cape Town has the ninth-worst traffic congestion in the world

By Larry Claasen The City of Cape Town will spend R444-million to relieve traffic congestion over the next three years. TRAFFIC congestion in Cape Town ranks...

RECOMMENDED

Cape Business News
Follow us on Social Media