Bloomberg News

Shell, Petronas South African Gas Stations Run Low on Strike

July 13, 2011

(Updates with Sasol comment from third paragraph.)

July 13 (Bloomberg) -- Royal Dutch Shell Plc and Petroliam Nasional Bhd gasoline stations in South Africa are running low on fuel after a strike by oil industry employees in the country that threatens to escalate as more workers join the pay dispute.

Shell’s South African unit had at least 40 of its sites in Gauteng, the country’s most populous province, run out of one or more grades of motor fuel, the Hague-based oil company said by e-mail today. Engen Ltd., a unit of Petroliam Nasional, or Petronas, reported 19 of its outlets were dry, spokeswoman Tania Landsberg told the South African Press Association.

Sasol Ltd., South Africa’s largest fuel producer, also said today that some of its gasoline stations were empty of stock.

“We are already bleeding, especially in Gauteng,” said Reggie Sibiya, chief executive officer of the Fuel Retailers Association, in an interview broadcast today by Johannesburg- based e-News Channel. “Gauteng is the hub of our economy.” The province faces a “crisis” in the next two days unless there’s a resolution to the strike, which began on July 11.

Workers are demanding pay gains of as much as 13 percent, while companies offered 6.25 percent, Clement Chitja, head of talks for the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union, said yesterday. The Solidarity union said today workers at Sasol and state-owned PetroSA, would join the strike.

“We’re waiting for the employers,” Chitja said by phone today, adding no date has been set for talks or mediation.

Economic Damage

Cobus Jansen, a spokesman for Sasol, said by e-mail that while the company’s plants were still operating, some of its retail outlets were out of stock as deliveries were “hampered by intimidation at depots.” Jansen said in an earlier message that the National Petroleum Employers Association may comment today on the status of wage negotiations with unions.

“There is no cause for public concern yet,” the South African Petroleum Industry Association said in an e-mailed statement today. Members, which include the biggest refineries, have had “some difficulties,” it said, without elaborating.

South Africa has six refineries with a combined processing capacity of about 692,000 barrels a day.

“On their own, the fuel strikes should only have a marginal impact on the economy,” Peter Attard Montalto, an economist at Nomura Plc, said from London. “However, there are strikes happening or looming in a number of other sectors and overall these could have a much larger potential impact.”

Mining Action

Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd., which together contribute about two-thirds of platinum supply, are threatened by strikes by South African workers.

“We are heading for a strike,” the National Union of Mineworkers said in an e-mailed statement today, declaring a dispute with Impala. The country’s biggest union has also “approached members at Anglo Platinum for a mandate to shake the biggest platinum company in the world,” it said.

Gold and coal producers such as AngloGold Ashanti Ltd. and Xstrata Plc also face action. Gold industry wage talks are deadlocked, while the NUM declared a coal dispute last week.

Consumer inflation rose to an annual 4.6 percent in May.

Glenda Zvenyika of BP Plc didn’t immediately respond to messages on left on her mobile phone seeking comment.

--With assistance from Mike Cohen in Cape Town and Franz Wild from Johannesburg. Editors: Tony Barrett, Randall Hackley

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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