Fears that fuel supplies may come under threat have come to the fore as the South African Transport and Allied Workers Union (Satawu) continues with its strike action. By the end of last week, the United Transport and Allied Trade Union (Utatu) had accepted both Transnet and the Passenger Rail Agency of SA's (Prasa) wage offers of 11% and 10% respectively. However, Satawu continues to demand a 13% overall wage increase.
Significance: The petroleum industry will join the agricultural, automotive, and mining sectors in being severely affected by the strike as imports and exports of merchandise are disrupted and fuel supplies to inland areas dry up. The situation is exacerbated by the fact that it is only 17 days before the start of the FiFA World Cup Tournament, hosted by South Africa. According to the Business Day, Avhapfani Tshifularo, the executive director of the South African Petroleum Industry Association, said that while the strike at Transnet has not yet resulted in fuel depots running dry, the escalation of strike action could severely affect the industry. He added that with the bottlenecks being created, some refineries are likely to experience an oversupply of petroleum products and could be forced to scale down production. This could add to supply pressures further down the line, thus prolonging the effect of the strike. The timing of the strike season just before the World Cup is harming the economy by hindering a recovery, and hurting investor confidence and perceptions, especially since the National Union of Mineworkers (NUM) is expected to down tools at power utility Eskom from Wednesday (26 May). This could not only threaten electricity supplies during the World Cup, but could lead to production disruptions in the mining and manufacturing sectors, thus exacerbating the harm already done by the transport strike. NUM workers are demanding an 18% increase in wages.
