The Congress of South African Trade Unions (COSATU) is deeply concerned about the impact of the massive increase in fuel prices of over R3 for petrol, R4 for paraffin, R5 for gas and R6 for diesel per litre.  This is on top of April’s already alarming hikes in fuel prices.  This is a painful blow that millions of struggling workers and commuters, and an already stagnant economy stuck at anemic 1% growth simply cannot afford.

Government’s extended fuel levy relief of R3 and R3.93 per litre of petrol and diesel for May and June is a welcome step forward, but more relief will be needed. 

We fear that workers, society and the economy will not cope with the planned reduction in the fuel levy relief by half in June and its phasing out in July if international oil and fuel prices continue to remain high and rise.  Oil and fuel supplies and prices may also take some time to return to pre-war levels even once the war ends.  We are deeply concerned that no relief has been found for the huge increase in paraffin prices.

Diesel is critical for the public and private transport that workers depend upon as is paraffin for millions of working-class families.  Workers who are already drowning in debt, supporting up to seven relatives each and spending an average of 40% of their meagre wages on transport; will not be able to continue to survive such painful petrol, diesel, gas and paraffin price hikes.

The most important source of relief for workers, society and the economy, is to maintain the fuel levy relief whilst oil and fuel prices remain high.  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 cause of this global economic crisis, the Middle East war drags on and inflation rises, additional interventions should be put in place, in particular adjusting social and the SRD grants for inflation, 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’ meagre wages must be protected from further bleeding. 

The private sector must contribute towards an economic and social relief package, commit to ending 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