Fuel strike takes hold

Service stations are hit with fuel shortages due to a petroleum industry strike as an upcoming drop in prices could spur even more demand.

Johannesburg - Service stations in South Africa have been hit with fuel shortages due to a petroleum industry strike that started July 28, as an upcoming drop in regulated retail prices could spur even more demand by motorists.

"There are service stations especially in the Gauteng province that are short of some fuel grades," Avhapfani Tshifularo, executive director at the South African Petroleum Industry Association, said in an e-mailed response to questions, referring to the nation’s richest province that includes the capital. "Deliveries are delayed due to the strike, but refineries are continuing to produce petroleum products."

There’s been little movement in negotiations between labor and industry since more than 20,000 members of the South African Chemical, Energy, Paper, Printing, Wood and Allied Workers Union declared a strike to meet demands of a 9 percent pay rise and a minimum basic monthly wage of R8 000 ($576). Companies including Sasol, Petroliam Nasional’s Engen, Chevron and Total are offering a 7 percent improvement in pay.

No meetings have been planned with the union, National Petroleum Employers’ Association Deputy Chairman Zimisele Majamane said by phone.

Read also: Fuel strike: ‘Some drivers threatened’

Retail fuel prices at South Africa’s 4 600 service stations are regulated by the government. The 95-octane gasoline grade will decrease by 99 cents to R12.35 per litre in Gauteng on August 3, the Department of Energy said July 29 in a statement. The strengthening of the rand against the US dollar decreased the cost of mostly imported fuel.

BLOOMBERG