Poor suffer most with petrol hikes

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IOL bus Independent Newspapers Increased petrol prices are already having a significant socially detrimental impact and will continue to do so as petrol prices continue to rise, says the writer.

To the poor, cash is king. Rising fuel prices compound the problem of access to cash, says Bernard Daniel Joseph.

Cape Town -

Potassium nitrate, sulphur and carbon are three innocuous chemical elements, but combined can create gunpowder and thus explosives.

The same can be said of three elements of the South African landscape – the rising cost of living (especially the fuel prices), unemployment and poverty. These three elements are causing a lot of suffering, starvation and exploitation.

These price increases will affect the price of goods across the country. South Africans, already struggling with rapidly rising living costs, will be forced to pay higher taxi fares, train fares, bus fares and these increased transportation costs will push up the cost of food over time.

Since December 2011, poor people in particular have faced a significant increase in the cost of daily survival. This is forcing South Africans to make difficult decisions about what to cut from their budgets. Most often the cuts are made in food, leading to starvation and hunger.

The growing number of families that are dependent on social grants as well as children using the school feeding scheme is a testimony to the vulnerability experienced by poor communities.

Increased petrol prices are already having a significant socially detrimental impact and will continue to do so as petrol prices continue to rise. The individuals and groups who are disproportionately disadvantaged by the increasing price of petrol are:

* Vulnerable people with a low income or on welfare, or people with disabilities.

* Community organisations, NGOs that serve the poor.

* Regional, rural and remote communities.

Over the past 10 years, the fuel price has, on average, increased by 11 percent or R1 a year. This is far above the official inflation rate which has hovered around 6 percent. This implies that South Africans are not getting richer but poorer. The most vulnerable section of society is our poor people.

Poor people live in extended families where one employed member frequently supports 10 other unemployed family members. Compounding the problem is a high rate of indebtedness.

We currently have approximately 20 million economically active citizens and 50 percent of them have bad credit records that make accessing cash in an emergency a remote possibility. To the poor, cash is king. Rising fuel prices compound this problem of access to money.

The suffering is acutely felt by the poor, especially the rural poor. Poor people, especially rural poor, also depend on community organisations and NGOs that often act as a safety net providing basic needs. Expensive petrol impacts these NGOs too and make the provision of services even more expensive and difficult.

At the heart of our constitution is the belief that the mark of a civilised community is in the help and support it gives to those most in need.

The question is what benefit is our much vaunted constitution to the poor when rising prices tend to make access to basic food a daily struggle?

A case study of a contract worker living in Elsies River can be illustrative of the problem. To get to work this person spends R40 a day on public transport from Elsies River to Milnerton.

He earns an average of R120 a day. To spend 30 percent on transport is ludicrous, but imagine if said worker lived in Khayelitsha.

The R3 600 earned by the worker above is ludicrous compared to the Sasol chief executive who received a 68 percent pay increase to match his salary package with those of comparable global resources companies. The increment takes his total package to R53.7 million for the year.

The Greeks used to ask: “Who stands to benefit?” What is clear is that with every increase justified on exchange rate issues the government, refineries and certain individuals are raking it in.

The fuel levy was in the past a government cash cow designed to fund the bush war of the apartheid regime and dates back to 1965. Our present government quickly saw the wisdom of the apartheid administrators and just continued to rake it in at the expense of the poor consumer.

What is needed is a comprehensive review of all levies and taxes placed on the price of fuel to determine which ones, in which quantity, continue to be justified in the light of the substantial impact they have on the economy, quantifiable research on the impact on the poor of South Africa and an investigation into the why and how we are paying international prices at Sasol pumps for a locally produced fuel.

Bernard Daniel Joseph

Provincial elections co-ordinator for the Economic Freedom Fighters

 

Cape Argus



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