Fuel price shock deepens strain on agriculture sector

Government has responded to concerns of many South Africans, including the agricultural leaders and farmers who have expressed their frustrations with the cost of petrol and diesel following the war between Iran and the United States.

From today, 1 April, consumers are paying more for fuel due to the ongoing war. Petrol costs R3.06 per litre more and diesel prices increased by a staggering R7.37 (0.05% sulphur) and R7.51 (0.005% sulphur) per litre.

To soften the blow, the ministries of treasury and mineral resources and energy announced in a joint statement that the general fuel levy is temporarily reduced by R3 per litre. The cut will be effective from Wednesday 1 April 2026 to Tuesday 5 May 2026.

“This will reduce the general fuel levy for petrol from R4.10 per litre to R1.10 per litre and reduce the general fuel levy for diesel from R3.93 per litre to R0.93 per litre for one month.

“It is estimated that the partial reduction in the fuel levy will cost around R6 billion in foregone tax revenue for the one-month period. The relief measure will be re-evaluated on a monthly basis for the following two months,” the departments stated.

Panic buying drives shortages

The government assured the public that there is sufficient fuel supply in the country to meet current and projected demand.

“Reports of shortages in certain areas are largely due to localised distribution and logistical challenges driven by panic buying rather than a lack of national fuel stocks and these are expected to self-correct in the next coming days.

“Motorists and businesses are encouraged to purchase fuel responsibly and avoid unnecessary stockpiling,” the departments said.

Chief economist at the Agricultural Business Chamber of South Africa (Agbiz), Wandile Sihlobo, said that fuel accounts for a notable share across various agricultural value chains, particularly during the harvesting and planting periods.

With winter crop planting starting in April and harvesting beginning in May, Sihlobo warned that these high-use periods will put immense financial strain on farmer.

“Understandably, some stakeholders may want to buy more fuel now… Still, we must avoid stockpiling, as this short-term artificial demand may cause temporary supply friction in some areas,” he said.

For farmers the going is about to get tougher as input costs are likely to make the operational costs to be extremely high leading to consumers having to take the pinch and digging deeper in the pockets.

Setjhaba Ramabenyane, a mixed farmer in the Free State, said the rush to beat the increase turned diesel into a high-risk asset. He noted that during the March panic-buying phase, diesel trucks were hijacked as the commodity became a target for criminals.

“Stockpiling has proven to be a security risk… The hike rendered previous financial projections obsolete. Whatever you planned now will no longer make sense. It means automatically everything increases,” he said.

To offset these rising overheads, Ramabenyane is currently exploring the replacement of heavy, diesel-thirsty tractors with drones for field spraying. By moving toward unmanned aerial vehicles, he hopes to eliminate a significant portion of his fuel consumption during critical maintenance periods.

“It’s just a tough time for us as farmers,” Ramabenyane said.

Fuel & fertiliser hikes a double burden

Sihle Petela, a livestock and crop farmer in the Eastern Cape, echoed the concerns regarding the broader cost pressures facing the sector. He said while fertiliser supplies remains available, the combined financial burden was undeniable.

“The effect of the fuel price increase didn’t only affect the fuel industry; fertiliser prices have also gone up, leaving us strained,” he said.

Meanwhile, a commercial egg farmer in Mpumalanga, Lebogang Mashigo, said her business is forced to adapt to protect its margins against the rising cost of transport.

“We are going to increase our price a bit to cover diesel costs,” she explained, noting that the traditional model of including transport in the product price is no longer sustainable.

Mashigo has scrapped free delivery options for her clients. Customers are now charged based on the kilometres travelled and are encouraged to pre-order and collect directly at the farm outlet to minimise the farm’s time on the road.

Meanwhile, AgriSA and Agbiz emphasise that the current situation does not appear to be driven by a single identifiable factor, but rather by a combination of global oil market volatility, supply chain dynamics, and behavioural responses within the market. In such conditions, pricing signals play a critical role.

“Fuel represents a significant input cost in agriculture, typically accounting for between 12% and 18% of production costs. Any disruption in availability, particularly during peak planting, harvesting, or transport periods, poses a direct risk to food production, supply chains, and ultimately food security,” they said in a statement.