In a statement, the Department of Mineral Resources and Energy (DMRE) has announced further fuel price hikes that will come into effect tomorrow, the 4th of October 2023. The South African Federation of Trade Unions (SAFTU) is concerned that this eighth consecutive increase in especially petrol and diesel will worsen the cost of living and affect the working class negatively.
By SAFTU Admin – The latest increases means that between October and January 2023, the prices of unleaded petrol 93 have increased by R4,12, unleaded petrol 95 by R4,28, whilst diesel 50ppm and illuminating paraffin have increased by R1,87 and R3,67 respectively.
These price increases will affect workers and the unemployed in at least three main ways: elevating costs of fuel for vehicle owners, causing road transport fare to rise and causing prices of other goods to also increase.
The lack of reliable and efficient public transport in this country has led to an increase in the number of people owning private vehicles. The reliance on private vehicles as working people flee for comfortable rides, has even led to them organising “lift clubs” to work. Lift clubs are an improvisation by private vehicle owners to cut fuel costs, and still retain the comfort that comes with riding privately. The increase in the prices of petrol and diesel will make it expensive for these workers who ride daily to work using their own vehicles individually, or as part of lift clubs.
The destruction of Passenger Railway Agency of SA (PRASA) has led to the increase in taxis on the roads, as road transport became the only alternative mode of transport in providing short-distance and long-distance trips. In its full capacity, PRASA could transport between 2,5 and 3 million passengers daily. In the wake of its destruction, hundreds of thousands of passengers have switched to buses and taxis.
The taxi industry increases commuter fares almost in tandem with the consistent rise in diesel and petrol prices. However, they often do not reduce their fares when fuel prices decreases. For instance, when there was a surge in fuel prices last year, the taxi fares increased generally across the country, but when the prices of fuels eased, there was no easing in the taxi fares. The consecutive rise in prices of fuel this year have caused another wave of taxi fare hikes, making commuter road transport even more expensive.
The Household Affordability Index (HAI) by Pietermaritzburg Economic Justice and Dignity research group bears witness to this worsening situation. Between September and January 2023, the index reported that the amount spend on taxi fare monthly from-and-to work by a full time employee (working 21 days per month) increased by R72. Compared to January 2022, the monthly taxi fare increased by R168. The index further showed that a worker on full time employment (working 21 days per month) spends R1 512 monthly from and to work using a taxi.
Similarly, the increase in fuel prices will have a direct impact on retail and wholesale logistics. Pursuing wider profit margins, these big corporates will absorb increased costs through pricing. The consequence will be the rise in prices of goods they offer in their stores.
In aggregate, the direct increases of fuel and the consequential rise in prices of other goods means the working class, both of low and middle incomed households, are facing hard times in balancing the costs of their household needs and essentials.
SAFTU calls on government to subsidise fuel prices to provide immediate relief to the working people. However, a long term solution should be governments and their multilateral trade institutions halting the speculation in commodities such as oil, and imposing global price controls. Still, a permanent solution is needed. It can only come by abolishing commodification and reorganising the world economy to meet the social needs of our people, not of profiteers.
