The Congress of South African Trade Unions (COSATU) urges swift action by government to stave off a pending July fuel price hike. International oil prices have skyrocketed by 10% over the past week with Israel’s latest assault on peace in the Middle East with its brutal attacks on Iran. This is likely to see an increase in petrol prices across the world and be a painful blow to millions of South African workers and commuters already struggling to cope with the rising costs of living as well as a still fragile economy that has stumbled along 1% economic growth for the past decade plus.
Whilst there is little the South African government can do to prevent the rising oil prices beyond intensifying international solidarity campaigns with the long struggling Palestinian people and offering support for an end to the war of aggression and the implementation of the long called for two state solution; it is critical that government put in place urgent measures to help cushion workers and the economy from a pending and likely very painful fuel price hike in July.
Key interventions needed include:
- Reviewing and lowering the taxes and levies consuming a third of the fuel price.
- Putting in place measures to address the chaos and maladministration at the Road Accident Fund and expediting the tabling of the RAF and Road Accident Benefits Schemes Bills at Parliament to lessen its dependency on the fuel levy.
- Additional measures to return Transnet to full productive capacity to help shield food from inflation.
- Accelerating investments in Metro Rail to return all lines to full capacity offering 10 million urban commuters cheaper and faster means to travel to work and education institutions.
- Enhancing support for buses and taxis to reduce the use of private transport.
- Adjusting the SRD Grant for value lost to inflationary erosion, helping ensure 8 million of the most vulnerable are able to buy essential food items.
- Increasing the allocations of free electricity and water to indigent households.
- Expanding the Presidential Employment Programme to provide a pathway to work for millions of unemployed, in particular the youth.
- The South African Reserve Bank lowering the repo rate to ease debt repayments for millions of struggling consumers.
- Expediting engagements on the next phase of the Two Pot Pension Reforms to give further relief to millions of highly indebted workers.
It is critical that government move with speed and be proactive. South Africa cannot afford to be found wanting with yet another global conflict spiking international oil and thus the domestic fuel price regimes. The South African Reserve Bank will need to resist its default trigger finger lest it be tempted to add further pain to workers by increasing the repo rate. With inflation at 2.8% and far below the inflation target range, there is ample space for further rate cuts and zero need for any hikes.
COSATU will continue to engage with the Presidency, Treasury, and the Department of Transport amongst others on the need for urgent action to cushion the working class and economy from any potential pain due to the wars in the Middle East.
Issued by COSATU
Matthew Parks (COSATU Parliamentary Coordinator)
Cell: 082 785 0687
Email: matthew@cosatu.org.za