‘Road shed­ding’ costs big

Protests have neg­a­tive rip­ple ef­fect on econ­omy

The Independent on Saturday - - FRONT PAGE - TANYA WATERWORTH, ARTHI GOPI and DUN­CAN GUY

ROAD shed­ding – block­ing ma­jor trans­port routes through protest – hurts the econ­omy.

That was the com­ment by econ­o­mist Mike Schus­sler yes­ter­day as the traf­fic com­ing into Dur­ban from the two ma­jor free­way routes, N3 and N2, was brought to a stand­still with mo­torists left sit­ting in traf­fic jams for sev­eral hours.

The picket against petrol and VAT hikes started yes­ter­day morn­ing with mem­bers from Cosatu, Pappi (Peo­ple Against Petrol and Paraf­fin Price In­creases), the Pro­gres­sive Youth Al­liance and SACP gather­ing and chant­ing “down with petrol price in­creases” at the Mar­i­an­hill Toll Plaza, west of Dur­ban, which was closed.

There were also “go slow” ve­hi­cles along both free­ways block­ing nor­mal traf­fic flow. From the N2, traf­fic was af­fected from Ton­gaat, north of Dur­ban.

Mid­lands lawyer Mike Forsyth said it took him three hours to get from Hil­ton, in the KwaZulu-Natal Mid­lands to Dur­ban North yes­ter­day. It nor­mally takes around one hour and 15 min­utes.

“Mo­torists had to drive at a snail’s pace for stretches of about 15km, speed up for about 1km, then come to a halt.”

While there were no re­ported in­juries, stun gre­nades were used by po­lice at the toll plaza at one point, and there were re­ports on so­cial me­dia of at least one in­ci­dent where the back win­dow of a ve­hi­cle was bro­ken.

By late yes­ter­day af­ter­noon, the N3 free­way had been af­fected in both di­rec­tions, with pick­et­ing crowds mov­ing towards Spaghetti Junc­tion (the EB Cloete In­ter­change just out­side Dur­ban).

At the protest, Pappi con­venor Visvin Reddy called for the re­moval of taxes and levies in the fuel price and for a wealth tax to be im­posed on top com­pa­nies listed on the JSE.

But Schus­sler has warned that such protests are counter-pro­duc­tive, hav­ing a neg­a­tive rip­ple ef­fect on the econ­omy.

“It’s sim­ple. It hurts the econ­omy when we keep block­ing the roads. I call it road shed­ding. The govern­ment has said they are try­ing to find a so­lu­tion, so let’s wait. We are very quick to protest, but protests are feed­ing into the whole pic­ture – for ex­am­ple, in­sur­ance will go up in the trans­port and truck­ing in­dus­try or goods be­ing de­liv­ered are de­layed.”

In a press brief­ing this week, En­ergy Min­is­ter Jeff Radebe touted that cap­ping the price of 93 oc­tane could lead to com­pe­ti­tion with 95 oc­tane, re­sult­ing in over­all lower petrol prices. He con­firmed a con­sul­ta­tion process has started with the pe­tro­leum in­dus­try which has un­til Oc­to­ber 18 to re­spond.

De­tails on whether the capped amount would mean a higher 93 oc­tane price over a fixed term was un­clear, and whether the sav­ings would be jus­ti­fied would be up to mo­torists to work out.

The Fuel Re­tail­ers’ As­so­ci­a­tion said it would not com­ment on the pro­posal.

“Cap­ping it is fine, but we re­ally have to look at free­ing up the mar­ket. It’s a struc­tural prob­lem,” Schus­sler said, high­light­ing so­lu­tions could be al­low­ing self-ser­vice, lim­ited con­tracts which could be re-ne­go­ti­ated and to in­crease the num­ber of sup­pli­ers for garages.

He fore­cast a drop in petrol prices in De­cem­ber or Jan­uary.

An­other econ­o­mist, Dawie Roodt, asked, “What does cap­ping mean? There is lit­tle scope to re­duce the petrol price. You can cut here and there. But in­di­rect pos­si­bil­i­ties in­clude im­ple­ment­ing the right poli­cies would see the rand ap­pre­ci­ate, and the petrol price go down.

“Or make more use of coal to petrol. This kind of project is ex­pen­sive but very lu­cra­tive, as you can pro­duce petrol at sig­nif­i­cantly lower costs.”

Pappi said it re­jected the govern­ment’s pro­posal of in­tro­duc­ing a cap on 93 oc­tane, with Reddy call­ing it “so naive that at first one would think it’s a joke. Re­tail­ers will not be able to re­duce the price of other fu­els be­cause the same govern­ment reg­u­lates those prices”.

Cosatu’s KZN pro­vin­cial sec­re­tary Ed­win Mkhize said, “We re­ject the VAT and fuel hikes as noth­ing less than dump­ing the bill for the loot­ing of billions of rand of work­ers’ taxes by some pub­lic ser­vants of­fi­cials, politi­cians and pri­vate sec­tor. We de­mand govern­ment re­duce the fuel levy and other taxes and tax the wealthy to sub­sidise the poor.”

Spokesper­son Lay­ton Beard said while the AA was not part of the pro­pos­als on the cap­ping of 93 oc­tane, it wel­comed any mea­sures to lower the fuel price.

On whether 93 oc­tane was bet­ter than 95 oc­tane, Beard said it was left to driv­ers to un­der­take the nec­es­sary re­search on what fuel to put into their ve­hi­cles.

African News Agency (ANA) LEON LESTRADE

COSATU added its voice to the masses call­ing for an end to the in­crease in the price of petrol. The protest took place at the Mar­i­annhill Toll Plaza, west of Dur­ban, from 10am yes­ter­day. |

VISVIN REDDY

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