SA’s labour movement demands fuel price cut

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By Staff Reporter

The South African Federation of Trade Unions is extremely concerned at yet another increase in the price of fuel, saying it will have a devastating impact on millions of South Africans who are still struggling from increases in VAT, the Fuel and Road Accident Fund Levies and earlier fuel price hikes.

As of midnight Tuesday, the cost of 93 and 95 grades of petrol increased by 99 cents and 100 cents a litre respectively.

The cost of diesel went up even more, by R1.24 a litre, illuminating paraffin by R1.39 per litre and the maximum price of Liquified Petroleum gas by R1.79 per kilogramme.

“The Automobile Association is right to warn that these increases will be ‘catastrophic’ for road-users. But it will not only be motorists who suffer. As always the immediate increase in the fuel price will soon be followed by rises in taxi and bus fares and then by the prices of all the goods that are transported to the shops by road.  The 55% of 14 million South Africans who are already living in poverty will be joined by thousands more who will have to cut their spending,” SAFTU stated in a press release Wednesday.

“Overall household consumption will fall. The South African Reserve Bank points out that it has already dropped by 1.3% in the second quarter of 2018 as spending on goods declined, particularly durable goods which were down 11.2%. This is cutting the overall level of spending on goods and services, which will slow down economic growth and lead to even more lost jobs.”

The petrol increase, SAFTU noted, is being blamed on ‘International factors’, mainly the rising cost of crude oil at a price set internationally – from $74.25 to $78.25 per barrel, and also because of the unwillingness by the Organisation of Petroleum Exporting Countries (OPEC) to increase their production outputs – and to the fall in value of the rand against the dollar.

“The government, which sets the price of petrol at the pump, must act immediately to repeat what it did in September and freeze the price of petrol to provide temporary relief for consumers. Yet it is refusing to do the same this month. The government must also abolish the fuel levy which is charged on every litre of petrol sold,” stated SAFTU.

“It rises automatically every time the petrol price rises, yet has nothing to do with world market prices. It is really just a tax, administered by the National Treasury, which treats it as a general tax and not, as many people assume, for road-related expenses.”

 

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