COSATU says government should lower fuel taxes immediately to cushion the blow from the spike in fuel prices.
As of Wednesday 6 September, a litre of petrol will cost you R1.71 cents more, while diesel will cost R2.84 cents per litre more. A litre of paraffin increases by R2.78.
Cosatu’s Acting Spokesperson Matthew Parks says the administration promised to review fuel taxes in 2019 and 2022 but nothing has happened.
Parks says it will spur inflation, which while it slowed last month, is sure to rise again, and thus nudge the Reserve Bank to increase the repo rate once again.
Poor households are already struggling to survive under these difficult conditions and an increase in the price of paraffin will leave many poor families worse off. This increase in fuel prices will create a level of hardship for a society that is already suffering from high levels of unemployment and stagnant or declining real wages. Low- and moderate-income families are going to be plunged further and further into debt because their wages are now inadequate to afford the basic amenities.
A recent National Credit Regulator’s report confirms workers are drowning in debt. This coupled with electricity price, food prices and rising interest rates is making it increasingly harder for workers to take care of their families.
These higher fuel prices drain the purchasing power of most South Africans and retard economic recovery.
Small business is also at risk as the sustainability of thousands of SMMEs will be in question, and will place their employees in danger of losing their meagre wages and being retrenched.
We are still puzzled by the government’s reluctance to release the research report on the feasibility of a fuel price cap in South Africa, and a comprehensive review of the fuel price regime with the intention of reducing the taxes which constitute 28% of the fuel price regime. This unfulfilled commitment was made by then Minister for Energy, Jeff Radebe in September 2019 and Ministers for Mineral Resources and Energy and Finance, Gwede Mantashe and Enoch Godongwana in April 2022.
Parks says attention must also be given to the failing Road Accident Fund, and it must be placed under administration.
In addition, Parks says COSATU expects government to adjust social grants in the Medium Term Budget Policy Statement, in particular the SRD Grant, to protect their recipients from to the impact of higher prices.