The latest adjustment in fuel prices, effective September 3, 2025, marks a welcome development for both the agricultural sector and consumers grappling with higher living costs, besides allowing farmers and households alike to breathe a sigh of relief on the eve of the 2025/26 summer crop season.
Both grades of diesel have declined by 56 cents per litre, representing a drop of nearly 3% month-on-month and 5% year-on-year. Petrol has also edged down, albeit more modestly, by 4 cents per litre.
These movements come as international crude oil prices soften, driven by increased global supply and tempered demand in the face of tariff-induced uncertainty around global growth. A relatively stronger rand, hovering below R18 to the US dollar, has further supported this downward shift.
Agriculture sector
For agriculture sector, the timing could not be better. The sector is preparing for another promising season, with forecasts of La Niña pointing to the likelihood of better-than-average rainfall across summer crop areas.
Lower fuel costs directly reduce input expenses for farmers, improving margins and encouraging an expansion of planted areas. The ripple effect is significant: increased production potential, healthier balance sheets for farmers, and ultimately, more stable food prices for consumers.
This relief extends beyond the fields. Consumers, who have been under pressure from rising living costs, will feel some benefit in their monthly budgets. While the petrol cut is modest, the sharper decline in diesel prices matters greatly since diesel is central to both logistics and farming.
As transport costs ease, the savings are likely to filter through the value chain, helping to keep food price inflation contained.
Crude oil prices
Brent crude oil prices have been relatively subdued in recent months, moving sideways since mid-year and remaining below levels seen at the start of 2025.
While bouts of volatility tied to geopolitical conflicts and sanctions have created temporary spikes, the dominant theme has been OPEC’s decision to ramp up oil output amid tepid global demand. The result has been a steady build-up of supply, keeping oil prices in check.
On the currency front, the rand has managed a degree of resilience. Its performance has been underpinned by stronger terms of trade, supported by firming precious metal prices alongside softer oil prices.
While much of the currency’s movement reflects a weaker US dollar amid questions over the American economic outlook, South Africa’s broader policy trajectory—including fiscal consolidation, low inflation targets, and structural reforms—provides longer-term support for rand stability.
Breathing space for farmers
The broader takeaway is that lower fuel prices today provide breathing space not only for farmers about to embark on the planting season but also for consumers facing tight budgets. For households, this reprieve offers an opportunity: the extra cash flow, however modest, can be directed towards paying down debt, building emergency savings, or making smarter spending decisions, such as leveraging loyalty programmes when filling up at the pump.
While uncertainties remain in global oil markets and currency trends can shift quickly, the current reprieve is well-timed. With benign inflation prospects and improved prospects for agricultural output, South Africa has an opportunity to consolidate the gains.
If sustained, the easing in fuel prices could contribute meaningfully to growth in the agricultural sector and a gradual reduction in pressure on consumer inflation.
The September adjustment is a reminder of how intertwined global markets, local currency performance, and domestic food security are. For now, both farmers and consumers can welcome this rare moment of positive news.
By Koketso Mano, FNB Senior Economist; Paul Makube, FNB Senior Agricultural Economist; and Ester Ochse, Product Head at FNB Integrated Advice.
