Pretoria – The South African Federation of Trade Unions (SAFTU) has welcomed the proposed temporary reduction of the fuel levy that Finance Minister Enoch Godongwana announced on Thursday.
Godongwana announced that the general fuel levy would be temporarily reduced by R1.50 per litre from 6 April until 31 May. The levy currently accounts for at R3.85 per litre.
“Though the reduction in the fuel levy is likely not adequate to sustain a downward pressure on the prices of fuel, we anticipate that it will nonetheless have some temporary downward pressure or at least contain the prices from rising further in the interim period,” said SAFTU General Secretary, Zwelinzima Vavi.
South Africa’s petrol and diesel prices are still looking set to rise in April, albeit by a smaller margin.
Although April’s official fuel prices have not been announced as yet, unaudited late-month data supplied by the Central Energy Fund points to increases in the region of R1.80 for 95 Unleaded petrol, R1.72 for 93 Unleaded and R3.00 for 500ppm diesel.
Vavi said the inflation on oil and fuel is influenced by global economic and political forces such as the current invasion of Ukraine by Russia, and the sanctions that accompanied it.
“But even before the war, fuel prices were rising. This had resulted in the steep surge in the prices of petrol and diesel. Between February 2019 and February 2022, the petrol prices rose by about 33% whilst diesel has risen by 48%.
“This was impacting on prices of other goods and the general transport costs for passengers and car-owners,” he said in a statement.
Vavi said food inflation is now 6.7%, transport inflation 14.3, and generally life has become unbearable in particular for the 12.5 million unemployed people.
He said reduction in the fuel levy, must be seen in this light, “a concession to the impending resistance against price hikes of fuel, and to add, of electricity”.
Godongwana also announced various permanent adjustments to the fuel price calculation, effective from June. These include a price cap on 93 Unleaded petrol, as well as other interventions that will be announced in more detail later.