IN CONVERSATION WITH MATTHEW PARKS

The Congress of South African Trade Unions has called for urgent and expanded government intervention to shield the economy and vulnerable households from the anticipated fallout of ongoing conflicts in the Middle East. According to recent reports by the Central Energy Fund, South Africans could face steep fuel price increases, with petrol expected to rise by over R3 per litre, diesel by more than R10, and paraffin by over R7. These projected hikes come at a time when the domestic economy has been experiencing sluggish growth of around 1% for more than a decade, coupled with a critically high unemployment rate of 41.1%. The International Monetary Fund has further downgraded South Africa’s 2026 growth outlook from 1.4% to 1%, underscoring the fragile economic environment. While COSATU has welcomed government’s temporary R3 per litre fuel levy reduction as a necessary first step, the federation maintains that this measure alone is insufficient to absorb the full impact of rising global oil prices. Concerns have been raised about the ability of workers and the broader economy to withstand further increases in fuel costs, particularly given the heavy reliance on diesel for public transport and paraffin for household energy among low-income communities. The federation highlights the financial strain on workers, many of whom are already burdened by high levels of debt, support extended families, and spend a significant share of their income, estimated at around 40% on transport. Rising fuel costs are therefore expected to exacerbate existing socio-economic pressures. COSATU has acknowledged the fiscal constraints facing government and welcomed Finance Minister Enoch Godongwana’s commitment to engage on further relief measures. However, the federation emphasises the urgency of additional interventions, particularly in light of the uncertain duration of the conflict in the Persian Gulf and the delayed recovery expected in global oil and gas supply chains. Among the key proposals put forward is a further reduction in the fuel levy and associated taxes, viewed as the most immediate and impactful form of relief. COSATU has also called for measures to make public transport more affordable and to address the cost of paraffin, which is not subject to the fuel levy. Should inflationary pressures persist, the federation advocates for a broader package of social and economic support. This includes adjusting social grants, including the Social Relief of Distress (SRD) grant, in line with inflation; expanding food assistance programmes; implementing targeted interventions to stabilise food prices through support for agriculture and Transnet; and engaging Eskom on reducing electricity costs. COSATU has also urged the South African Reserve Bank to avoid further repo rate increases, arguing that current inflationary pressures are externally driven. In addition, COSATU has called on the private sector to play an active role in mitigating the crisis by halting retrenchments and offering temporary relief measures such as loan and insurance payment holidays. The federation further advocates for a coordinated economic stimulus package, led by government in partnership with financial institutions, to support economic recovery. COSATU has reaffirmed its commitment to continued engagement with government and stakeholders to advance a comprehensive set of interventions aimed at protecting workers, vulnerable communities, and the broader economy during this period of global uncertainty. Instagram · Twitter