September’s diesel increase could add around 0.4% to 0.6% to food prices through higher transport costs alone, assuming operators and suppliers pass the additional costs through in full.
South Africa’s sharp September diesel increase could add to food-price pressures as higher transport costs move through the country’s heavily road-dependent supply chain, although the eventual impact on grocery bills may be relatively limited.
Diesel is rising by an average 11.35%, a significant increase for road-freight operators, with fuel accounting for between 35% and 55% of their operating costs depending on the type of operation, routes, vehicles and conditions, according to the Road Freight Association (RFA).
A basic calculation of the increase against fuel’s share of operating costs suggests the latest diesel hike alone could push overall road-freight costs up by roughly 4% to 6%.
This matters for grocery bills because research shows more than 80% of South Africa’s food is transported by road. Higher diesel costs can therefore work their way through the supply chain as food moves between producers, processors, distribution centres and retailers.
