The Congress of South African Trade Unions (COSATU) presented its submission in support of the Second Special Appropriation (2025/26 Financial Year) Bill to Parliament’s Standing Committee on Appropriations.  This progressive Bill tabled by the African National Congress led government allocates R10 billion to the Central Energy Fund’s Equalisation Fund to help insulate workers, commuters and the economy from international oil price volatility.  It is critical that Parliament pass it as a matter of extreme urgency.

This Bill is a bold and necessary intervention to protect workers, commuters and the economy from an external shock not of South Africa’s making.  The escalating United States led war in the Persian Gulf has destabilised global oil markets. With shipping disrupted in the Strait of Hormuz, Brent crude oil has surged from $75 to over $115 per barrel. As a net importer of oil, South Africa is now facing the direct fallout of this conflict.

This is not just a fuel price issue. It is a cost-of-living crisis. Workers spend up to 30% of their wages on transport. A R2 to 3 per litre hike wipes out wage increases. It pushes taxi and bus fares up and threatens to make food even more expensive for working class families.  It takes money that we cannot spare out of the economy. 

Increases in the fuel price over the past few months as a result of the war have pushed inflation beyond the Reserve Bank’s target range, thus sparking repo rate hikes.  This has plunged millions of workers deeper into debt and suffocated already weak economic growth.  It has been a major cause of the rise in unemployment over the past two quarters.

Government did well to provide R18 billion Fuel Levy relief in its initial response to the fallout from the war.  This helped cushion workers, commuters, SMMEs and the economy from the 25% and 50% hikes in petrol and diesel prices.  It helped reduce the rise in inflation and prevented one repo rate hike.

This Bill gives space for further such relief to workers and the economy.  With fuel price hikes of at least R2.50 projected for October, it is critical that Treasury and the Central Energy Fund move with speed and utilise this R10 billion to provide badly needed Fuel Levy relief for October and November.  This would help ease the cost-of-living pressures facing workers, lower inflation and thus prevent yet another potentially devastating repo rate hike in November.

COSATU will continue to engage with Parliament on the need to expedite this progressive Bill and Treasury on the urgency of providing further relief to workers, commuters, SMMEs and the economy.  We cannot control the war in the Persian Gulf, but we can control how we protect South Africans, and in particular the working and middle classes, from it.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za