South African refineries operational despite strike, fuel supply stable

Caltex operated Grassroot oil refinery, Cape Town

*Caltex operated Grassroots oil refinery, Cape Town.

01 August 2016, Cape Town — Output at South Africa’s oil refineries has continued despite an indefinite wage strike by workers, the petroleum association said on Monday, while fuel retailers urged motorists not to panic as union leaders consider expanding the strike action.

Around 15,000 members affiliated to Chemical, Energy, Paper, Printing, Wood and Allied Workers union began the strike on Thursday, demanding a nine percent wage hike and one year deal, while employers were offering less.

On Friday, around 8,000 CEPPWAWU workers started a similar strike in South Africa’s pharmaceutical sector, joining colleagues in the mining and manufacturing sectors seeking higher-than-inflation wage increases flagged by policymakers as a danger to an already weak economy.

“Refineries continue to produce,” South African Petroleum Industry Association executive director Avhapfani Tshifularo said.

Some parts of Gauteng province, the country’s commercial hub, which includes Johannesburg and the capital Pretoria, had faced some delivery delays, he said.

Drivers ferrying fuel from depots to service stations were being threatened, he said, but did not give details.

“There is no way forward as yet and the strike is still continuing,” said Clement Chitja, head of collective bargaining at the union.

He said other sectors, particularly the industrial chemicals, had certificates allowing for strike action and union leaders were meeting on Tuesday to agree a way forward.

Chitja said should an agreement be reached, a 48-hours notice will be issued and the strike could start by Friday at the earliest.

“The one in particular that may help bring changes into the petroleum sector is the industrial chemicals sector,” he told Reuters.

This would mean another 5,000 to 10,000 workers downing tools, affecting fertilizer firms and chemical companies such as Sasol, he said.

Reggie Sibiya, chief executive officer at the Fuel Retailers Association, said mainly poorer areas were being affected by fuel delivery delays and disputed the claims of violence against the drivers.

“Oil companies don’t want to go deliver there and are using safety as an excuse. It’s not because there is no product,” he told Reuters.

Africa’s most industrialized economy, which holds local elections on Wednesday, is a net importer of refined petroleum products. The government said previously that fuel shortages could cost the economy around 1 billion Rand ($72 million) a day.

A similar wage strike in 2011 that lasted almost three weeks saw petrol pumps run dry as panicked motorists filled up their vehicles. Sibiya urged motorists not to panic.

“There is no need for panicked buying. There is no crisis,” Sibiya said.

Chevron said on Monday operations at its 110,000 barrels a day Cape Town plant were continuing and measures were in place to minimize the strike’s impact.

At some service stations certain types of fuel were not available due to delivery problems, a Reuters witness said.

*Wendell Roelf; Editing – James Macharia & David Evans – Reuters

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