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Fuel strikers set to reject new offer

Cape Town - South Africa’s fuel workers are likely to reject a revised wage offer, the main union’s chief negotiator said on Tuesday as a week-long strike in the sector, which has left pumps at hundreds of service stations dry, looked set to intensify.

Tens of thousands of fuel sector workers walked off the job last week, delaying deliveries and sparking panic buying at pump stations in the country’s economic hub Gauteng.

The strike has left filling stations across the country dry and could cost the economy billions of rand.

Talks between the industry and the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu) are deadlocked, said Jerry Nkosi, the union’s chief negotiator.

"We are not reaching an agreement because the employers are not listening to our demands. We are not happy with the revised offer," he said.

On Monday employers raised their wage offer to between 8% and 10%. The previous offer was for a rise of between 4% and 7%, while unions have asked for 13%.

Demands for double-digit increases are unreasonable, the head of the South African Petroleum Industry Association (Sapia) Avhapfani Tshifularo said on Tuesday.

He said the revised offer of 8% to 10% was reasonable and compared well with increases in other industries.

"We believe that the offer on the table is reasonable because it takes into account such things as basic minimum wages, cost of living and it compares very well with other industries," he told Reuters, adding that the impact of the strike, which entered its second week on Monday, was "enormous".

More consultations

"We will go to our members and get a mandate but the strike will not be suspended... We don’t expect our members to accept (the offer)," Ceppwawu’s general secretary Simon Mofokeng said.

The union and smaller trade group Solidarity said they will hear back from their members later this week.

Citi economist Jean-Francois Mercier said that should the strike end this week, it would affect July production and retail data, but companies are likely to catch up some lost output.

"If it drags on, we have three or four weeks with fuel restrictions, and you end up with businesses struggling to stay afloat, people losing their jobs... then the impact would be more lasting and damaging," he said.

The strike action has caused hundreds of service stations to run out of fuel.

"My report this morning puts dry sites at 264 across the country ... 200 are in Gauteng," said Tania Landsberg, spokesperson at fuel retailer Engen, which runs 510 service stations in Gauteng and 1 200 nationally.

Fuel industry employers include BP, Shell, petrochemicals group Sasol [JSE:SOL], state-owned energy firm PetroSA, Engen, Chevron and Total.

Shell said fuel distribution had improved after police stepped in to prevent further incidents of intimidation and violence at depots.

"While we still have a considerable backlog to clear, we hope we can sustain deliveries to improve product availability at our retail sites in Gauteng," it said, adding that about 80 of its fuel stations were without one or more grades of fuel.

Logistics group GAC said alternative plans had been made to lift bunker fuel to vessels, although there were still delays.

Unions and employers are locked in their mid-year bargaining session, with many labour groups seeking wage increases that far exceed inflation.

Strikes are looming in South Africa’s gold and platinum sectors, which could threaten global supplies at a time when commodity prices are red hot.

A two-week strike in the steel and engineering sector ended on Sunday. In a separate dispute, Solidarity union said it had agreed to an 8% wage increase with employers in the paper and pulp sector. 

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