Poor have capitalism to thank for fuel spike
Against the backdrop of the recent fuel price hike in our country – the fifth in 2018 taking the price to its highest ever – loud alarm has been expressed, including from the working class.
Some members of the general public out of frustration rather than understanding of the current economic situation and capitalist system, have opportunistically laid the blame at the door of President Cyril Ramaphosa.
Some economists laid the blame at the door of the Organisation of Petroleum Exporting Countries (Opec), saying its members operate like a cartel, colluding on setting world oil prices.
The SA Petroleum Industry Association (Sapia) responded, defending Opec.
Capitalists, liberals and their cronies always say we must understand that oil prices are determined by market forces – the demand and supply of oil on the international oil market.
But it’s important to note who benefits from high oil prices and who suffers, including in South Africa.
Avhapfani Tshifularo, Sapia’s executive director, points out that “petrol prices in South Africa are not the most expensive in the world”.
Prices are cheapest in the mainly oil-producing nations, ranging from 11cents per litre to R5.50: Venezuela R0.11; Iran R3.57; Sudan R4.29; Kuwait R4.37; Algeria R4.53; Egypt R4.64; Ecuador R4.92; Nigeria R5.27; Syria R5.50; and Turkmenistan R5.39.
These nations receive oil revenue from their wells and possibly also subsidise their petrol prices.
South Africa is not an oilproducing nation and does not subsidise its petrol price.
A significant portion of our petrol prices is tax while most oil-producing nations have lower or no tax at all because they receive revenue from crude oil sales.
The following are the most expensive countries per litre of petrol: Iceland R27; Hong Kong R26.67; Norway R25.72; Holland R24.83; Greece R24.31; Monaco R24.15; Italy R24.14; Israel R24.03: Denmark R24.02; and Portugal R23.50.
In all of these countries the people who bear the brunt of the high petrol price are invariably the working class.
I share some of the sentiment that says Opec operates like a cartel. It manipulates the supply and demand of oil throughout the world.
I also think there are risks to the supply of oil - which Opec is undoubtedly aware of, which can push oil prices upward. These include geopolitical risks in Iran and Venezuela, both Opec members.
With regard to Iran – the third largest producer in Opec – there are fears of Iranian oil supplies being interrupted as US sanctions against Iran take effect from November.
Fuel hikes have an immense impact on the working class, imposing hardship and also inhibiting the success of our revolution. In military terms, no general has won a war with hungry and frustrated soldiers.
In our country, people continue to be ravaged by poverty, unemployment, inequality and corruption.
But it is important to remember that inequality in our country didn’t just happen, it was created.
And now the gap between the rich and poor is continuing to widen.
The hikes will hit people in various ways – pushing up their living expenses, things such as rent, bonds, grocery bills, transport costs to work and general daily expenses.
Ultimately, these fuel hikes increase the over-indebtedness of the working class as they cannot afford their daily or living expenses.
This leaves people more vulnerable than ever to loan sharks and the cycle of loaning money at exorbitant interest rates. This, as members of the same working class are subjected to SMS’s telling them they are eligible for this loan or that. The plight of the working class makes them easy pickings for those cruelly attempting to lure them into taking more loans.
Basically, it is quite clear that the working class is unable to contend with the upward spiral of fuel hikes which is rendering workers less and less able to feed their families.
The general outcry on social networks and the number of cars that visit filling stations across the country in the hours before the fuel hikes take effect is testimony to the increasing unaffordability of fuel and the dire conditions of our working class.
There are moments in history when people rise up to say that something is wrong and to ask for a change.
This is what happened in the tumultuous years of 1848 and 1968. Each of these years of upheaval marked the beginning of the new era.
Our struggle for socialism is more relevant as people continue to suffer the impact of rampaging fuel hikes. I hope people will begin to understand that their predicament is the fruit of capitalism – a cruel system characterised by these hikes.
Even when markets are stable they often lead to high levels of inequality, an outcome harshly felt by the working class.
So, rather than blame individuals, let’s blame the system that has produced these hikes. That’s the bottom line.
Clearly a new political system is needed, one to end people’s sufferings. I believe that system is socialism.
It’s important to note who benefits from high oil prices and who suffers, including in SA