Capping price of 93 octane petrol will cost jobs‚ warn fuel retailers

The proposal would also accelerate job losses in the sector‚ said Sibiya. “If every service station reduced their staff by four each at 5‚000 service stations‚ we are looking at 20‚000 job losses.”

Peter Morgan‚ CEO of the Liquid Fuels Wholesalers Association that represents 46 independent fuel wholesalers‚ said his association was concerned about the unintended consequences of the proposal and that it would hurt transformation in the sector.

“When you start allowing the retailer to fix the maximum price‚ the big guys will immediately cut prices‚” said Morgan.

It may seem a good idea for the motorist‚ but the larger players will squeeze smaller‚ typically black‚ players out. Sites further out from urban areas‚ where transformation is taking place‚ are battling to be sustainable as it is. Introducing this kind of price competition would be likely to cause some of them to collapse‚ said Morgan.

Although not necessarily opposed to the idea of deregulation‚ Morgan said it was rather a question of timing. “First give us time to fix the transformation issue and then deregulate the price‚” he said.

The South African Petroleum Industry Association said thorough consultation and a transparent process was imperative.

Total SA said it supported the consultations and was working with the industry.

BP said such a substantial change in policy needed to be properly considered and discussed so that the consequences could be fully understood.

The department has extended the deadline for input to the end of January.

BusinessLIVE

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