BUSINESS Eswatini (BE) has cautioned that the latest fuel price increases will trigger a broad inflationary impact across the economy, placing additional strain on already vulnerable businesses and households.
BE Chief Executive Officer (CEO) E. Nathi Dlamini said the consecutive monthly increases, particularly in diesel, were likely to raise operating costs across multiple sectors, as fuel remains a critical input in transport, logistics, agriculture, mining, manufacturing and construction.
He noted that many businesses were already grappling with subdued consumer demand, rising utility costs and ongoing cashflow challenges, making the latest adjustments especially difficult to absorb.
“The increases will have a broad-based inflationary effect on the economy,” Dlamini said, adding that small and medium enterprises (SMEs) would be hardest hit due to their limited financial buffers and lack of economies of scale.
He explained that such businesses often do not have the capacity to hedge against fuel price volatility, leaving them exposed to sudden cost shocks.
While certain sectors are more directly affected, Dlamini emphasised that the impact would ultimately be felt across the entire economy.
He further highlighted the social implications of the increase in illuminating paraffin, noting that many low-income households still rely on it for cooking and lighting.
This, he said, could reduce disposable income and weaken overall consumer spending.
Dlamini said businesses have already raised immediate concerns following the announcement, citing rising transport and distribution costs, mounting inflationary pressures, reduced consumer purchasing power and tightening cashflow conditions.
He added that many firms were also worried about their inability to pass increased costs on to consumers in a timely manner, as well as potential disruptions to supply chains and existing pricing contracts.
According to Dlamini, the rising cost of diesel for backup power generation has also emerged as a growing concern, particularly in light of electricity reliability challenges.
