FEDUSA Calls for Temporary Suspension of the Fuel Levy

24 March 2022

The Federation of Unions of South Africa (FEDUSA) has asked the government to intervene in runaway fuel prices. Fuel prices for all grades of petrol and diesel are expected to hit the R24 per litre in April as the Russian/Ukraine war drags on. The international price of crude oil is currently hovering around $108 a barrel from a high of $140 a barrel two weeks ago. These prices will strangle the already embattled motoring public further if the government fails to intervene. They were already paying more than R20 per litre before the start of the war.

FEDUSA specifically wants the government to conclude the review of retailers’ margins in the fuel price structure before the end of this month. This will bring much-needed relief to motorists and the commuting public. Treasury estimates that the review could reduce fuel prices by 86 cents a litre. During his Budget Speech in February, Finance Minister Godongwana announced that he will not increase the fuel price levy.

FEDUSA believes that this matter is a national concern and will once again have a severe impact on workers, businesses and SMMEs who have been crippled by the pandemic. Transfer of price increases to workers and commuters of transport have already been reported. Immediate intervention is therefore crucial.

Food security remains a critical risk factor as imports of sunflower oil as a key example from Russia is expected to increase alarmingly from R59 per 2 Litre bottle. Panic buying will be sparked and demand will only inflate costs further amidst the risk of collusion as seen with the PPEs during the lockdown.

The Ministerial Task Team must be expanded in its scope and the matter referred to NEDLAC, where all social partners including FEDUSA, who have a direct and vested interest will be included for a proper and transparent process that will guarantee joint and inclusive decision making and accountability.

Considering that the matter is of national concern, the modality of the referred Task Team must take on the form of the Rapid Task Team. With the potential of R24 per litre, work from home for workers in the manufacturing, retail and hospitality concerns are both impractical and non-feasible. We cannot be perpetuating poverty where these workers will be forced to work for transport costs. The modality and price structure of the interventions must not be deemed as once-off but must set the framework for future fuel price structure for South Africa. Stability and sustainability to industry and workers are required and not knee jerk reactions for revised profit recovery.

FEDUSA is also deeply concerned about signals coming from the Department of Mineral Resources and Energy which has indicated that the government might consider rationing petrol and diesel from a full tank down to a maximum of 50 litres per car per visit if the peace talk does not yield any positive results. The Department has indicated fuel rationing could be accompanied by calls to work from home and driving at moderate speeds.

However, the union federation welcomes the government’s additional plans of cushioning the economy against inflationary fuel price increases by subsidizing food producers and retailers and public transport operators such as taxis.

(528 Words)

For interviews please contact:

Ms Riefdah Ajam

FEDUSA General Secretary

079 696 2625

Mr Ashley Benjamin

FEDUSA Deputy General Secretary

083 258 4433

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