Agbiz economist Wandile Sihlobo says the latest data from the Central Energy Fund is suggesting inland diesel prices could increase 37 cents per litre and petrol 55 cents per litre on May 3.
This is largely driven by the weaker Rand/Dollar exchange rate and higher Brent crude oil prices.
Sihlobo says the entire agricultural sector will be negatively affected by the fuel price increase as it coincides with the summer crop harvesting period. It is also likely to impact winter crop growing areas where producers are set to start planting in May.
He says fuel costs make up roughly 11% of a grain farmer’s production costs in South Africa, with about a third of this used during harvesting season.