The Congress of South African Trade Unions (Cosatu) has urged parliament to urgently pass a special appropriation bill that would make R10bn available to mitigate the impact of rising fuel prices on South Africans. This call was made in Cosatu's submission to parliament's standing committee on appropriations on Wednesday. The bill proposes allocating R10bn to the Central Energy Fund's Equalisation Fund to protect workers, commuters, and the economy from international oil price volatility.
Cosatu's parliamentary coordinator, Matthew Parks, emphasized that the rising global oil prices, due to the conflict in the Persian Gulf and disruptions to shipping through the Strait of Hormuz, are placing further pressure on South Africa. Brent crude prices have risen from about $75 to over $115 a barrel at one point. As a net importer of oil, South Africa is exposed to international price movements, which exacerbates the challenge.
The federation highlighted that workers spend up to 30% of their wages on transport, making them vulnerable to fuel price increases. A R2 to R3 increase per liter could wipe out wage increases, while pushing up taxi and bus fares and adding to food costs. Cosatu noted that the government's previous R18bn fuel levy relief had helped cushion workers, commuters, small businesses, and the economy from sharp increases in petrol and diesel prices.
Cosatu proposed that the R10bn should be used for further fuel levy relief in October and November. With fuel price hikes of at least R2.50 projected for October, the federation urged the Treasury and the Central Energy Fund to act quickly and utilize this R10bn to provide badly needed fuel levy relief. This relief could help ease cost-of-living pressures and inflation and reduce pressure for another interest-rate increase.
The Congress of South African Trade Unions stated that it would continue engaging with parliament on the passage of the bill and with the National Treasury on further relief for workers, commuters, small businesses, and the economy. The federation emphasized that while they cannot control the war in the Persian Gulf, they can control how they protect South Africans from its economic impacts.
Cosatu's submission to parliament underscored the severity of the situation, describing it as a cost-of-living crisis rather than just a fuel price issue. The federation's concerns are rooted in the potential for increased fuel prices to have a ripple effect on the economy, affecting not just transport costs but also food prices and overall inflation.
The proposed R10bn fuel price relief bill aims to alleviate some of the economic pressures facing South Africans. If approved, it would provide critical support to workers, commuters, and small businesses, helping to mitigate the effects of rising fuel prices. Cosatu's advocacy for the bill's urgent approval reflects the organization's commitment to protecting its members and promoting economic stability in South Africa.
Key points
- Cosatu urges parliament to pass the R10bn fuel price relief bill to cushion South Africans from rising fuel prices.
- The proposed bill aims to allocate R10bn to the Central Energy Fund's Equalisation Fund to protect workers, commuters, and the economy from international oil price volatility.
- Cosatu proposes using the R10bn for further fuel levy relief in October and November to ease cost-of-living pressures and inflation.
