With fuel prices soaring, South African workers face a financial crisis. Trade unions are calling for urgent government intervention to alleviate the burden on consumers and protect the economy from further decline.
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With the fuel levy relief being extended motorists will still be forking out R3.27 per litre more for both grades of petrol, while diesel users will be paying R6.19 per litre more in May.
Trade unions and lobby groups have said that more needs to be done to help shield consumers from the soaring fuel price shocks by government as the effects of the United States and Iran war is beginning to reach our shores.
This comes after the Department of Mineral and Petroleum Resources (DMPR) announced the official fuel price increases for the month, on Monday.
The Congress of South African Trade Unions (Cosatu) said that it is deeply concerned about the impact of the massive increase in fuel prices over two consecutive months.
"This is a painful blow that millions of struggling workers and commuters, and an already stagnant economy stuck at anemic 1% growth simply cannot afford. Government’s extended fuel levy relief for May and June is a welcome step forward, but more relief will be needed," Cosatu said in a statement.
The trade union said that it fears workers, society and the economy will not cope with the planned reduction in the fuel levy relief by half in June and its phasing out in July, if international oil and fuel prices continue to remain high and rise.
"Oil and fuel supplies and prices may also take some time to return to pre-war levels even once the war ends. We are deeply concerned that no relief has been found for the huge increase in paraffin prices. Diesel is critical for the public and private transport that workers depend upon as is paraffin for millions of working-class families. Workers who are already drowning in debt, supporting up to seven relatives each and spending an average of 40% of their meagre wages on transport; will not be able to continue to survive such painful petrol, diesel, gas and paraffin price hikes," Cosatu said.
The union said that the most important source of relief for workers, society and the economy, is to maintain the fuel levy relief whilst oil and fuel prices remain high.
"This is the most impactful and cost-effective solution to this global crisis. Additional relief should be sought by making public transport more affordable to commuters," Cosatu stated.
Cosatu recommended that government should adjust social and SRF grants for inflation, delivering food parcels to social grant recipients, putting in place measures to protect food from inflation with targeted support for agriculture and Transnet, and engaging Eskom on measures to reduce the price of electricity if the Middle East war drags on for longer.
"The Reserve Bank must spare society further pain by not increasing the repo rate as this source of inflation is external and not domestic driven and workers' already limited wages must be safeguarded from further erosion. The private sector must contribute towards an economic and social relief package, commit to ending retrenchments and providing loan and insurance payment holidays for struggling consumers," Cosatu said.
The union added that government with the support of public and private financial institutions must put in place a bold stimulus package to kickstart an under-siege economy.
Abigail Moyo, spokesperson of the trade union UASA said that April saw a continuation of the United States’ war in Iran, which drove massive fluctuations in the global oil price, pushing oil prices to above $100 a barrel.
"This situation once again highlights the extent to which international developments can negatively affect domestic economic conditions, particularly affecting the disadvantaged," Moyo said.
"These increases will have far-reaching consequences for the cost of living. Employers, where feasible, are encouraged to consider flexible work arrangements, including remote work options, to assist employees in managing escalating transport costs, particularly for working parents with school children who also depend on transport," Moyo said.
Neil Roets, CEO of Debt Rescue said that consumers are facing an increasingly untenable financial reality, and the latest fuel price increases have significantly intensified that pressure.
Roets said, "Consumers have already adjusted their behaviour in response to earlier increases. Many are driving less, reducing trips, and cutting back wherever possible. However, there is a limit to how much further households can tighten their budgets, especially when daily commuting is essential to earning an income."
"We are now seeing a growing number of consumers being forced into difficult trade-offs, choosing between transport, food, and meeting financial obligations. For many, this balancing act is no longer sustainable," Roets addded.
The Debt Rescue boss said, "There is also concern around what lies ahead. The temporary fuel levy relief is set to reduce in the coming months, combined with ongoing increases in electricity tariffs and food prices, this creates a risk of a deepening financial crisis for households. At a human level, this is no longer just about rising costs. It is about survival. Without meaningful relief or stability in key cost drivers, more South Africans will slip into financial distress in the months ahead."
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