For the fourth consecutive month, fuel prices have been steadily declining after a period of sharp increases that forced farmers to scale back their operations, a situation further exacerbated by frequent power cuts.
In the fast-paced world of agricultural production where every kilometre counts, fuel costs can make or break the bottom line. For businesses that cover hundreds of kilometres daily, the fuel price cuts offer more than just temporary relief.
Nompumelelo Dhlamini, a Gauteng livestock farmer, said the fuel price drops have not been noticeable in her input costs. However, the reduction will influence her production targets because she uses private delivery services.
A little drop goes a long way
From today, the price of petrol dropped by 92 cents per litre while diesel dropped by 103 cents per litre – a welcome relief for agribusinesses. This is especially true for aquaponics and vegetable farmer Angelo Marman who delivers to various markets in the Western Cape.
“The drop in price is gonna come now in September and any drop in petrol [or] diesel is a win because we do deliveries every day. You’re looking at about R4 000 a month. So now you are at least saving on fuel costs, which is great. Any saving is good for a production company, especially in the agri sector,” he said.
A decrease in diesel prices can significantly influence production targets, helping balance income and expenditures more effectively. Marman said he hopes costs will continue to drop so that it can make a substantial difference in maintaining and even improving profitability in his business.
“Hopefully [there will be] more decreases in diesel costs and other kinds of costs. It will definitely help a lot and go a long way because we deliver about 300 kilometres a day. So yeah, make your sums on that one,” he noted.
Steve Sikwane, a livestock farmer in Thabazimbi, Limpopo, said while the relief is welcome, there needs to be a long-term solution to bring down the price of fuel.
“Is it important for the price to be regulated. It is totally unacceptable that at some point we as farmers have to cut down our operations because of the petrol price. It is even worse that farmers in the country do not get rebates, [and] all the high costs we must absorb.
“We are expected to create jobs, accept minimum wage and still face increasing operational costs. It is one thing to be excited about the fuel price going down but it is something else not knowing if for the rest of the year we will get such decreases. As a farmer, it is difficult to even budget,” he explained.
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Sikwane said bulk buying is not the answer unless one has space and security to store the diesel.
“Once you start talking about bulk buying the question of security arises. Will it be safe where you store it? Secondly, in the case of an emergency [and] fire breaks out, will it not make the situation even worse? But over and above it is the matter of how safe the bulk petrol will be in the wake of break-ins on the farms,” he said.
Long-term solution
The spokesperson of the Automobile Association of South Africa, Eleanor Mavimbela, said lower fuel prices are good news for all consumers.
“Apart from the immediate impact of buying cheaper fuel, input costs across various sectors are not impacted by higher fuel costs. At a time when most South Africans are still struggling to make ends meet, this is welcome news for all.
“Further to President Ramaphosa’s announcement in Parliament in July of a fuel review, the AA welcomes the news that the minister of finance, Enoch Godongwana, will soon table a fuel price intervention plan to cabinet. This is a positive development and, we believe, long overdue,” Mavimbela said.
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