Free State Agriculture warns against diesel price manipulation

(Photo: Laurens Schlebusch/VL)

Free State Agriculture (FL) says it is aware of cases where bulk fuel suppliers are withholding diesel from farmers in anticipation of price increases.

However, the organization says that it will not “allow farmers to be exploited through opportunistic price manipulation or supply restrictions at a time when agriculture is already under pressure”.

VL says he is also well aware of international concerns about fuel market disruption following the escalating conflict between the United States and Iran, and the domino effect this could have on South African agriculture and food security.

The conflict has already caused significant volatility in global oil and diesel markets, with disruptions in key shipping routes such as the Strait of Hormuz, through which around 20% of the world’s oil supply normally moves.

The developments drive up international fuel prices and increase the risk of disruption in the supply chain.

Although the South African government has indicated that there is currently no immediate fuel shortage, the country remains highly dependent on imported refined fuel products, VL warns.

This exposes the agricultural sector and the wider economy to sudden price shocks and possible supply constraints if the conflict escalates further.

The organization says diesel remains a critical input in agricultural production, which drives planting, harvesting, irrigation and the transport of food across the country.

“Any significant increases in diesel prices or disruption in its supply will inevitably put additional pressure on farmers and could contribute to higher food prices for consumers.”

VL says it is therefore monitoring developments in global fuel markets and the potential impact on agriculture and food security in South Africa. The organization will also continue to engage with stakeholders to protect the stability of South Africa’s food production system.