We expose how Sasol and the ANC government work together to keep the petrol price high

By Wed 6 March 2013, petrol will go up by a massive 81 cents. Taxi fare will go up; the food gangsters (Pick ‘n Pay, Shoprite and other large retailers) will hike their prices; virtually every item will go up in price. More of the working class will starve and die from hunger. Yet the petrol price should be much lower. The ANC govt and the Sasol bosses work together to keep the price high. We expose how they are working together against the masses:

What should the price be?

Out of every 10 litres of petrol sold, Sasol produces 4. The current oil price is about $113 per barrel while Sasol produces a barrel at between $10- $15 per barrel. Sasol produces petrol for most of Gauteng and the surrounding areas yet they sell it to the public at the international price- this is 7 times higher than the cost at which they produce it. This means that a litre of petrol in Gauteng should cost R1.27 but it is sold at over R9.00 (excluding taxes). If we add the general fuel levy and the Road Accident Fund tax then petrol in Gauteng should be about R4.27 per litre but it is sold at over R12.00.  The price of fuel inland is charged according to a formula as if the oil comes from a major port, yet the oil for Gauteng comes mostly from Sasol- so the price in Gauteng should be even lower than anywhere else in the region. If we spread out the value of what Sasol produces for the general consumer throughout the country, then the price of petrol should be about R9.00 per litre, including the govt taxes. Thus taxi fare, food and other items should actually come down in price. The ANC govt does not want to reduce these prices. Why?

Sasol before 1994

The fore-runner of the DA passed legislation in 1947 through a Mineral and Petroleum Act, to set up Sasol. The idea was to set up a cash cow for Anglo American to supply coal for the next few decades to produce petrol from coal. At the time, petrol was relatively cheaper, at much less than $10 per barrel while the cost of a barrel of oil from coal was about $15. The billions to construct Sasol 1 and the subsidy to Sasol for the higher cost of production were carried by the taxpayer (ie it was funded through the exploitation of the masses). The masses subsidized Sasol through the 1950’s and the 1960’s until 1973 when the price shot up above $15 per barrel. After 1948 Sasol also had the function of providing Afrikaner capitalists a stake in the exploitation of the masses on behalf of Anglo American and other monopoly capitalists. The apartheid regime had a clause that if the price of oil went above $30 per barrel, then Sasol would pay a ‘windfall tax’ (an extra tax because Sasol would be making massive profits of more than 100%). The price of petrol up to 1990 only rarely went above $30 per barrel so Sasol did not pay much windfall tax.

Sasol 1 was built through forced removals of the masses who were then dumped down-wind (in the direct line of the pollution from the production site). Sasol 1 was set up through technology from the USA (which had been taken from the defeated Nazi Germany). Thus US imperialism was involved from the start in Sasol.

The real cost of producing oil from coal or gas is higher than $16 per barrel. The apartheid regime helped Sasol and Anglo American make huge profits by not compelling them to pay for the sicknesses caused by this dirty technology. For example, in 2001, just from Sasolburg petrochemical plants, there were 42 000 tons of volatile organic compounds set free into the air. These pollutants are linked with causing anaemia, leukaemia and other cancers; 22 000 tons of Hydrogen Sulphide and 26 000 tons of Sulphur Dioxide were also released into the air- these pollutants are linked with asthma and respiratory problems. All of these together are linked with impacting on weather patterns.

Yet Anglo American and the apartheid regime turned a blind eye to this, after all, in their eyes, it was only expendable black people getting sick.

In 1990, when the apartheid regime was seeing its last days, Sasol was privatised. Today the major shareholders are the US banks, JP Morgan Chase, the bank of New York, Mellon Bank and some European banks.

Sasol since 1994, the era of the ANC democratic govt

While other locally made goods have had their subsidies taken away, Sasol continued (and still continues) to get subsidies for chemical by-products. In 1996 the Mandela govt signed an agreement with Sasol that they would be subsidized (as in the days of apartheid) if the oil price fell below $16 per barrel. Indeed, during Jan 1998 to June 1999 the price did drip to below $16 and Sasol received their subsidy from workers sweat and blood, thanks to the ANC govt. The trade-off was that Sasol was supposed to create 50 000 jobs. After 1999 when the price rose above $16, Sasol went back on their promise. Even by today, those jobs are nowhere to be seen. The ANC govt has never challenged Sasol over the pollution and sickness and early deaths caused by Sasol. The ANC deal with Sasol was supported by the Cosatu leaders in their so-called beneficiation policy.

By 2006 when the oil price was shooting above $60 per barrel, even a govt task team, embarrassed by the huge profits being made by Sasol through import parity pricing (producing, in this case, a barrel of oil at $10 -$15 per barrel but selling it at international price of $113 currently), recommended a token ‘windfall tax’. Minister of Finance, Trevor Manuel, with the backing of the entire Mbeki regime, opposed this. That year, for a job well done to the capitalists, the Mail & Guardian gave Manuel another A rating.

Over the past ten years Sasol level of profit has more than doubled. After 2008 when millions of workers lost their jobs through a recession, Sasol was increasing its profit by over 20% each year. Sasol has a presence in over 17 countries, including Nigeria, India and China, thanks to the many billions stolen from the masses in Africa.

Sasol’s first empowerment deal was in 1997 with the setting up of Exel petrol stations. The Minerals and Energy Minister at the time was Penuel Maduna. Today Maduna is the head of BEE at Sasol, and heads up Tshwarisano which is in a joint partnership with Sasol, Africa Energy Resouces and Engen in a joint venture called Uhambo, Southern Africa’s largest liquid fuel business. Africa Energy Resources is wholly owned by Worldwide Africa Investments which is headed up by Thuli Zuma. Here we have the reason why Sasol gets away with artificially high prices and continued killing off of the masses through their pollutants- the ANC leadership have been bought off by Anglo American and the US banks- they have a stake in the capitalist system and the continued exploitation of the masses. Sasol is also one of many monopolies that sustain labour brokers and super-exploitation.

The Cosatu leaders know all this but in their recent CEC at the end of February they have called once again for workers to mobilise for a 2014 election victory for the ANC! Can such a leadership lead a fight against high prices and for workers’ demands?

We should not be calling for the working class to be divided, such as some townships of Sasolburg to not be under Parys. We should be calling for the disbanding of the provinces and for the wealth to be centralised so that all working class areas, be they urban or rural should get the same resources, the same development, the same services. Let us set up high price action committees in every area and workplace to mobilise for protests against the government.

·         For the immediate lowering of the petrol price in SA and the region

·         For the immediate lowering of all prices

·         For Sasol and Anglo American to be compelled to pay for the death and sickness of the masses since Sasol was built in the 1950’s

·         For steps to minimise the pollution at all Sasol plants

·         Expropriate Sasol , without compensation, place it under workers’ control

·         For the phasing out of Sasol and its replacement with solar, wind and hydropower and other alternative, non-toxic methods

·         For Cosatu to break with the capitalist ANC govt

·         For the setting up of a revolutionary working class party, nationally, regionally and internationally

·         Forward to a workers government based on councils of workers delegates from all working places and working class areas.


Workers International Vanguard Party

www.workersinternational.org.za email workersinternational@gmail.com

ph 0822020617  ph 021 4476777 1st Floor, Community House, 41 Salt River rd, Salt River, 7925.