Petrol strike might hurt economic growth

By Drum Digital
03 August 2016

Economists have warned that the petrol strike will hurt economic growth if doesn’t end soon.

By Aphiwe Boyce

Economists have warned that the petrol strike will hurt economic growth if doesn’t end soon.

The strike, which is affecting refineries and petrol stations, started last week following a disagreement over wages between worker and employers in the sector. Production at the country’s oil refineries has continued despite the indefinite workers strike. Around 15 000 Chemical, Energy, Paper, Printing, Wood and Allied Workers union (Ceppwawu) members launched the strike on 30 July, demanding a 9% wage hike and one-year deal, while employers were offering 7% in a multiyear deal.

Already, some fuel stations around the country are running low. South African Petroleum Industry Association Executive Director Avhapfani Tshifularo said some parts of Gauteng province, the country's commercial hub, had faced some delays in deliveries although production was continuing. “Deliveries to service stations are slow due to intimidation of truck drivers by striking employees. Some sites are short of some fuel grades,” Tshifularo said

Wits Professor Jannie Rossouw said that at this stage the damage is still manageable, but warned that the strike put the country’s investment opportunities at risj. “This is a strike that SA cannot afford. This will have a bad impression in the international rating agencies.

The workers and employers need to find a solution quickly,” Rossouw said. He added that he was anxious about the impact of the strike on tomorrow’s local government elections.

Meanwhile the Institute for Race Relations (IRR) Chief Economist Ian Cruickshanks said the strike put further pressure on financially stressed households and businesses. “The strike doesn’t only affect fuel workers but every industry, especially manufacturing. If it prolongs, it will have a very negative impact on the cost of operations and cost of living,” Cruickshanks said.

He added that the ongoing strike would trigger the decline of foreign investment confidence. “The wage demand and the offer is very close. It should be easy for them to get a solution,” Cruickshanks said.

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