Price of fuel and paraffin: Govt must cushion negative effects - COSATU

Federation says increases will drain away the purchasing power of most South Africans

COSATU statement on the rise in the price of fuel and paraffin 

2 June 2018

The Congress of South African Trade Unions is deeply alarmed by escalating price of fuel and the impact it will have on the poor communities. This spells bad news for all South Africans but the impact on poor families will be even worse.

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. The chilling winter conditions will force many poor families to resort to dirty energy like coal and leaving them vulnerable to health hazards.

This increase in fuel prices will create a level of hardship for a group that is already suffering from high levels of unemployment and stagnant or declining real wages. Low- and moderate-income families are going to plunge further and further into debt because their wages are now inadequate to afford the basic amenities.

These higher fuel prices will also drain away the purchasing power of most South Africans and as a result this will retard the economic recovery and a slowing GDP will likely tip the economy into a recession. 
This fuel hike will fuel CPI and further impoverish workers.

While we understand that there is not much that government can do to reduce fuel price spikes, we expect government to at least cushion such effects by adjusting social grants, consider payroll tax cuts or other assistance to lower-income households to help offset the impact of higher increases.

We are also calling on our government to consider increasing subsidies for public transport and also work on investing in our transport system. There is an urgent need to improve the quality and efficiency of our public transport, particularly in poorer communities and rural areas.

We are also angry at government’s failure to clean up the Road Accident Fund that continues to wastes millions of rands on corruption. Our government must urgently copy China, Sweden, France and the UK and urgently invest and expand electric cars. This would help save consumers money, save the environment, boost the auto manufacturing sector and save Eskom by boosting demand for electricity.

COSATU affiliates will be pushing for worker's wages to be increased to manage this assault on them.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 2 June 2018