LICHTENBURG — Derek Mathews watches as an old fuel pump fills a tractor with diesel on his 1,700-hectare arable farm in South Africa’s North West Province. He frets over a nagging concern: how to secure and afford more fuel supplies before harvesting starts.

“It’s terribly expensive to buy fuel at the moment, but the question I need to answer right now is can I get fuel?” Mr. Mathews, 64, told Reuters.

Farmers in South Africa and many other countries are struggling with a double price blow – fuel and fertilizer costs have shot up as the US-Israeli war against Iran stifles key energy transit routes like the Strait of Hormuz.

While South African government officials and fuel industry executives have assured that the country’s stocks are sufficient for April, farmers say suppliers are grappling with higher demand, logistics constraints and hoarding of diesel.

Mr. Mathews, who purchased 20,000 liters of diesel in February at 18 rand a liter, said he had about 12,000 liters left by March 30, or six days’ worth of fuel for his farm as he prepares to harvest his sunflower and maize crops.

According to a March survey by agricultural body AgriSA, slightly fewer than half of farmers surveyed had difficulty sourcing diesel. Others managed inadequate purchases of between 50 and 500 liters.

“It’s the uncertainty that keeps you awake,” AgriSA CEO Johann Kotze said, adding that disinformation about fuel supplies has induced panic buying.

RISING DIESEL PRICES TO HIT PROFIT MARGINS
Mr. Mathews, who also produces dry beans and peanuts, ordered more diesel in March, by which time the price was 24 rand a liter, but the supplier has yet to deliver it.

Diesel prices are not strictly regulated in South Africa. However, the government said on Tuesday that it will temporarily intervene to cushion sharp fuel hikes by lowering the general fuel levy by 3 rand for April.

In its latest fuel adjustment, the government said that diesel wholesale prices will rise by up to 7.51 rand a liter on April 1 to just under 26 rand, while gas prices will rise by 3.06 rand a liter.

For now, South Africa has sufficient crop production to keep a lid on food prices.

“South Africa had a favourable agricultural season and has ample supplies that should contain excessive price increases,” Wandile Sihlobo, chief economist at Agricultural Business Chamber of South Africa, said during a Citibank client call on March 25.

Mathews, however, fears that could change if the war in the Middle East leads to a prolonged rise in fuel prices.

“If fuel prices remain at these elevated levels, with already depleted profit margins it doesn’t make any financial sense at all to grow maize,” he said of a food staple in South Africa.($1 = 17.0268 rand) — Reuters

SYDNEY — Australian Prime Minister Anthony Albanese warned the economic shocks of the war in the Middle East would be felt for months and encouraged citizens to take public transport in a rare address to the nation on Wednesday.

The address was broadcast simultaneously across major television and radio networks at 7 p.m. (0800 GMT). Similar addresses were made by previous prime ministers during the COVID-19 pandemic and the 2008 global financial crisis.

Australia, which imports about 90% of its fuel, has seen gas prices surge and experienced localized shortages as a result of the US-Israeli war on Iran and the blockade of the Strait of Hormuz.

“I understand that right now it’s hard to be positive,” Mr. Albanese said. “The war in the Middle East has caused the biggest spike in petrol and diesel prices in history. Australia is not an active participant in this war. But all Australians are paying higher prices because of it.

“The economic shocks caused by this war will be with us for months.”

Mr. Albanese encouraged citizens to “do their bit” to ease pressure on fuel supplies, such as not stockpiling fuel ahead of the Easter holidays, which begin this week, and taking public transport.

“If you’re hitting the road, don’t take more fuel than you need – just fill up like you normally would. Think of others in your community, in the bush and in critical industries,” he said.

“And over coming weeks, if you can switch to catching the train or bus or tram to work, do so.”

FUEL STOCKS BELOW RECOMMENDED LEVEL
The month-long conflict has spread across the Middle East, killing thousands, disrupting energy supplies and threatening to send the global economy into a tailspin.

Mr. Albanese said the coming months “may not be easy” but said the government would do everything it could to help Australians.

Earlier this week, the government announced it would halve the excise on gas and diesel and remove the heavy-road-user charge for three months to help households cope with a surge in costs driven by the war, at a cost to the government of around A$2.55 billion ($1.75 billion).

Australia has its highest fuel stocks in 15 years, but they are still far below the International Energy Agency recommendation of 90 days.

Treasurer Jim Chalmers said on Wednesday small businesses affected by the war would be given easier access to credit.

“We know that the fallout is affecting everyone, but we believe that by working together, if everybody does their bit, we can get through this difficult period,” Mr. Chalmers told reporters. — Reuters