December fuel prices increase: An assault On the Festive Spirit
The General Industries Workers Union of South Africa (GIWUSA) is angered by the Central Energy Fund’s (CEF) announcement of fuel price hikes for December, which mark a second increase since the end of the short-lived reprieve of the last months of falling oil prices. As GIWUSA consistently pointed out, there is no end to the volatility and upward mobility of the oil prices. Despite all the zig-zags in the oil prices, the trajectory and long-term curve is singular in its upward movement, which spells disastrous cost of living crisis for the working- and middle-class people.
Ultimately the oil crisis reflects the underlying organic crisis of capitalism reflected in the intensifying geopolitical conflicts and volatility in the commodities markets.
The latest fuel price increases are another grave assault on the festive spirit, which is turning the coming Christmas into black Christmas. The Festive season that has opened up is clearly going to be a nightmare for working people and far from joy and festivities working people legitimately expect after months of back-breaking toil and suffering.
Fuel Increases
The anticipated fuel price hikes for December 2024, going into effect tomorrow (04 December 2024) are going to force motorists to dig deeper into their pockets to afford fuel, and inevitably hiking the already high costs of transport, private and public. The increase in fuel prices will also raise the cost of living, which has already reached horrific levels with many people struggling to pay for food after transport and electricity
With fuel prices changing as follows:
• Petrol 93: decrease of 10 cents per litre (-3cpl)
• Petrol 95: increase of 2 cents per litre (-3cpl)
• Diesel 0.05%: increase of 47 cents per litre (-3cpl)
• Diesel 0.005%: increase of 47 cents per litre (-4cpl)
• Illuminating paraffin: increase of 43 cents per litre (-2cpl)
This is as a result of a weaker rand and higher global oil prices, which loudly requires the workers’ movement to remain strong on our determination to fight the ongoing crisis of cost of living. The working class remains not only vulnerable to market fluctuations, with no control over their lives, which is the reality of life under capitalism in general. In the current epoch on intensified geopolitical tensions playing themselves in bloody revelry in Eastern Europe and genocidal war in West Asia, two major fuels and food producing regions in the world, it is absolutely certain that the cost-of-living crisis will not only continue into foreseeable future.
Every indication clearly shows that the crisis is only going to deepen in the coming period owing to elections in the US, and victory of the right-wing populist President Trump who is determined to wage trade war with BRICS including SA. These and other indications are going to increase inflationary pressures on oil and food prices.
Volatility in the global markets and increased Inter-imperialist tensions.
As we’ve previously said, one cannot stress or emphasize enough that the recent decreases were merely a short-term relief and do not address the root causes of high fuel prices, which are driven by both volatilities caused by speculative activity in the commodities and financial markets – especially currency where the rand is one of the highly-traded currencies – and geopolitics, now we see it in practice with the opposite travel in the movement of fuel prices.
The price will likely rise in coming days due to the impact of the imperialist U.S./Israeli war on the peoples of West Asia, which could affect the energy markets with the same damaging impact as in case of the illegal Russian invasion of Ukraine, spiking prices nearly 50% from February through July 2022. The most important factor of all – the need to reduce CO2 emissions caused by oil, methane gas and coal combustion, so as to avoid planetary arson – is not even a matter the short-sighted government or the ruling capitalist class are contemplating, which compels rapid just transition to renewable energy and fuels.
The minor decreases over the past five months did not address the root causes of either the volatile energy markets or society’s cost-of-living crisis. They only ended at the filling stations and did not have follow on impacts on the cost-of-living. What one can be almost certain of is that there will be a hike in the cost of goods, proportional to that of fuel, because food suppliers consider the cost of fuel which is used during production when setting prices and they will not hesitate to hike prices when those of fuel hike.
To address these problems, GIWUSA demands.
To ensure sustainable and affordable fuels for working-class people and Small, Medium, and Micro Enterprises (SMMEs), we proposes the following:
1. Nationalization of the Petrochemicals Industry: Public ownership will enable democratic control over fuel prices, ensuring they serve the needs of the people, not just corporate profits.
2. Creation of a Low-Cost Economy: Implement policies to reduce production costs, increase efficiency through mass public works programme to upgrade public infrastructure and services, public transport and promotion of local economic development.
3. Price Regulation: Establish a transparent and accountable pricing mechanism based on the democratic consumer councils and regulatory bodies that is democratically representative of public interests, to prevent price gouging and ensure fair prices for consumers including affordable fuels.
4. Investment in Renewable Energy: Accelerate the transition to cleaner, affordable energy sources to reduce dependence on volatile global markets. The newly established State-Owned National Petroleum company, a renationalised Sasol and other petrochemical monopolies can be mobilised to lead this transition to green hydrogen and other clean fuels, but done properly, not as these firms typically do, rife with displacement, exploitation, uncompensated extraction, migrant labour and pollution.
5. Cross subsidization for Working Class people and SMMEs: Implement measures to help Poor people and SMMEs access affordable fuels, such as subsidies or targeted support programs. Free Basic Electricity, for example, needs expanding from 50kWh/household/month on a means-tested basis, to a universal 2kWh/person/day with progressive pricing and taxes to ensure cross-subsidies balance the books.
GIWUSA calls on the government to take concrete steps towards these proposals to ensure that lower fuel prices are sustainable and benefit working-class people and SMMEs. We will continue to mobilize and fight for affordable fuels and a more equitable, socialist economy that works in the interests of working- and middle-class people, and not just the tiny elite of the filthy rich, their big corporations dominating the commanding heights of the country’s industry, global supply chains and financial markets.