Parliamentary statement regarding the fuel price increase made by UDM Finance Spokesperson (4 March 2008)

The UDM expresses its sympathy with all South Africans who will from midnight have to deal with the effects of a 61 cent increase in the price of petrol. This comes at a time when interest rates are already on the rise on the back of escalating inflation.

We can assume that this latest increase will filter immediately into the costs of such basics as food and transport fares. Most notably this latest increase will hit the poor and the working class harder than others since these expenses already make up a large proportion of their household expenditure.

We appreciate that the vagaries of escalating international oil prices and unfavourable exchange rates exposes this country to these price increases. However, it is also true that more than 40% of our fuel is locally manufactured, not imported. Yet the industry and government are complicit in a scheme that charges the consumer as if that fuel was imported and paid for in dollars. The liquid fuels industry is over-regulated and the consumer is paying a heavy price.

Another unspoken reality is that a significant proportion of the fuel price is tax levied by Government. This is a regressive tax that hits the poor harder than the rich. And Government continues not only to maintain this tax, but to increase it annually. Thus next month, when consumers will still be reeling from tomorrow’s increase, the fuel price will increase yet again to reflect the tax increases announced by the Minister of Finance last month. This situation is forcing poor households to choose between bare essentials like food and transport.