Government’s R3 a litre fuel levy cut is a positive first step but much more relief from the massive rise in fuel price hikes due to the war in the Middle East is urgently needed.
Whilst appreciating this effort to cushion society from the international oil price spike, we fear that workers, society and the economy will simply not cope with a R3 a litre hike for petrol and more worryingly a devastating R7 a litre hike for diesel and R11 for paraffin. Diesel is critical for the public transport that workers depend upon as is paraffin for millions of working-class families. Workers already drowning in debt, supporting up to seven relatives each and spending an average of 40% of their meagre wages on transport; will not manage such painful diesel and paraffin, and even petrol price hikes.
The Congress of South African Trade Unions (COSATU) is sensitive to the real fiscal pressures facing the state. We welcome the Minister for Finance Mr. Enoch Godongwana’s commitment to engage upon and put in place further relief to protect society and the economy from this crisis over the next three months. This is urgent and important given that no one appears to know when the cause of this crisis, the war in the Persian Gulf, will end and once it does, it will take some time for oil and gas supplies to return to full capacity, and their prices fall to pre-war levels.
The most important source of relief for workers, society and the economy, is to further reduce the fuel taxes and levy. This is the most impactful and cost-effective solution to this global crisis. Additional relief should be sought by making public transport more affordable to commuters.
If the war drags on and inflation rises, additional relief should be put in place, in particular adjusting social and the SRD grants, delivering food parcels to social grant recipients, putting in place measures to protect food from inflation with targeted support for agriculture and Transnet, and engaging Eskom on measures to reduce the price of electricity. The Reserve Bank must spare society further pain by not increasing the repo rate as this source of inflation is external and not domestic driven and workers’ wages must be protected from further bleeding.
The private sector too must contribute towards an economic and social relief package by committing to end retrenchments and providing loan and insurance payment holidays for struggling consumers. Government with the support of public and private financial institutions must put in place a bold stimulus package to kickstart an under-siege economy.
COSATU will continue to engage government on a package of bold, progressive and decisive measures to cushion workers, the poor and the economy from this global crisis.
Issued by COSATU
Matthew Parks (COSATU Parliamentary Coordinator)
Mobile: 082 785 0687
Email: matthew@cosatu.org.za
