SAFTU concerned at effect of latest fuel price increase on the poor

4 July 2018

The South African Federation of Trade Unions is deeply concerned at the effect that today’s increase in the price of petrol and paraffin will have on the living standards of workers. It will inevitably lead to further increases in the price of other goods and services, and yet again the poorest will suffer most’

The lowest earners will be hardest hit, as they spend a larger than average portion of their income on transport and on food. Both will become more expensive, as bus and taxi operators raise their fares and retailers increase prices to pass on to consumers the increased cost of transporting goods from farms and factories.

80% of grain is transported by road, so the increase is bound to lead to rises in the cost of many basic foods. Farmers will also have to pay more for fertilisers, pesticides and herbicides needed for crop farming.

What makes this increase even more alarming is that it comes just as the knock-on effects of last month’s fuel price increase are being felt, and that another increase is predicted for August. 

To offset the big loss of spending power of the poorest South Africans, SAFTU calls on government to immediately increase social grants and the wages of public service workers, especially the lowest paid, to cushion them from the drop in living standards which they face. 

The federation also demands that private employers increase wages above the current level of inflation, which is certain to accelerate in the coming months, and will give its full support for unions who are currently negotiating for increases which will take account of this fall in what their current wages can buy.

SAFTU will also campaign even more strongly against the poverty national minimum wages of R20, R18, R15 and R11 an hour, which was nowhere near enough for a family to live on when it was first proposed, and which is becoming worth less and less in real terms every month.

The federation further demands to know why South Africa’s fuel prices have to be tied to the world price of Brent crude oil, and why we buy petrol at import-parity prices, which means prices are based not on what it actually costs to produce it but on what it would cost a South African petrol importer to purchase the petrol from an international refinery, transport the product from that refinery, insure the product against losses at sea and land the product on the South African shores.

Sasol was created to produce fuel from coal and sell it at a price that reflected the actual cost of production, but since it was privatised this company has been solely interested in maximising its profits with no regard to the impact of price increases on the people of South Africa. 

Sasol must be renationalsed and mandated to find ways to produce cheaper fuel and become independent of the international oil industry which is dominated by a few giant monopolies who collude to fix prices.

The rising cost of living for the workers and the poor will be discussed at the Working Class Summit (WCS) to be held on 21- 22 July 2018 at the University of Johannesburg Soweto Campus. 

It aims to unite civil society formations, employed and unemployed workers, those in the informal sector and in more secure work, the students and the landless, the homeless and those fighting against the scourge of violence against women and children, into a struggle for a truly free, corruption-free, democratic and equal society.

We call on all those interested in participating in the WCS to contact us.

Issued by Patrick Craven, SAFTU, Acting Spokesperson, 4 July 2018