The Congress of South African Trade Unions (COSATU) notes with extreme disappointment yet another round of massive fuel price hikes averaging R3 per litre of petrol, diesel and paraffin. This is yet another blow that the working class and the economy simply cannot afford.

Petrol and diesel prices have skyrocketed by more than 25% and 50% over the past few months due to the ill-considered and illegal war in the Persian Gulf. 

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 R3 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 diverts 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 further 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 devastating hikes in petrol and diesel prices.  It helped reduce the rise in inflation and prevented one repo rate hike.

It is a tragedy that Treasury and the Department of Mineral and Petroleum Resources failed to act now to provide some cushion for commuters and the economy to manage this brutal shock. 

The Second Special Appropriation Bill currently before Parliament, provides R10 billion to the Central Energy Fund’s Equalisation Fund.  It should be utilised to provide badly needed relief to the working class and the economy. This would 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 and government 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