Farmers urged to stock one month’s fuel supply

To date, fuel supplies across South Africa have been only marginally disrupted by striking petroleum industry workers.

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As the nationwide strike enters its third week, another strike in the petroleum sector looms that could be more disruptive, especially for the country’s agricultural sector. 

Petroleum workers are demanding a 9% wage increase, while the employers’ association is offering 7%.

Negotiations have reached a deadlock, with both parties refusing to compromise.

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Reports now indicate that National Union of Metalworkers of SA (Numsa) members employed at petrol service stations could also go on strike if further mediation fails.

“In the short term there is not much concern, but if it does not get resolved within the next week or so we might run into some trouble,” warned Wandile Sihlobo, head of economic intelligence and agribusiness at Agbiz.

“Some farmers [in North West and the western Free State] are still busy with some field work [harvesting and delivering maize to silos].

If the strike is prolonged, impairing fuel supplies even further, farmers might not be able to deliver their crops and that could result in [problems].” Sihlobo suggested that stockpiling a month’s supply of fuel in tanks on farms could help in the short term.

On the positive side, Sihlobo said early indications suggested that a possible decrease in fuel prices was on the cards. “We might see a further R1 decrease in the petrol price and a R1,20 decrease in the diesel price in September.”

The decrease was driven by the recent strengthening of the rand and lower Brent crude oil prices due to large supplies in the global market.

He cautioned, however, that this would only hold true if the rand remained below R14 to the dollar and Brent crude oil traded below $45 (R613) a barrel.