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Striking workers wait near the entrance to the Engen refinery in Durban as the stay away goes into a second week. (ROGAN WARD/REUTERS/ROGAN WARD/REUTERS)
Striking workers wait near the entrance to the Engen refinery in Durban as the stay away goes into a second week. (ROGAN WARD/REUTERS/ROGAN WARD/REUTERS)

South African fuel workers set to reject new pay offer Add to ...

South Africa's fuel workers are likely to reject a revised wage offer, the main union's chief negotiator said on Tuesday as a week-long strike in the sector, which has left pumps at hundreds of service stations dry, looked set to intensify.

Tens of thousands of fuel sector workers walked off the job last week, delaying deliveries and sparking panic buying at pump stations in the country's economic hub, Gauteng province.

Talks between the industry and the Chemical, Energy, Paper, Printing, Wood and Allied Workers' Union (CEPPWAWU) are deadlocked, said Jerry Nkosi, the union's chief negotiator.

"We are not reaching an agreement because the employers are not listening to our demands. We are not happy with the revised offer," he said.

On Monday employers raised their wage offer to between 8 and 10 per cent. The previous offer was for a rise of between 4 and 7 per cent, while unions have asked for 13 per cent.

"We will go to our members and get a mandate but the strike will not be suspended … We don't expect our members to accept (the offer)," CEPPWAWU's general secretary Simon Mofokeng said.

The union and smaller trade group Solidarity said they will hear back from their members later this week.

Employer body SAPIA said the unions' demands were unreasonable and that the latest offer compared well with increases in other industries.

Citi economist Jean-Francois Mercier said that should the strike end this week, it would affect July production and retail data, but companies are likely to catch up some lost output.

"If it drags on, we have three or four weeks with fuel restrictions, and you end up with businesses struggling to stay afloat, people losing their jobs... then the impact would be more lasting and damaging," he said.

Labour minister Mildred Oliphant warned against violence during strikes and urged all parties to reach a deal soon.

"Prolonging the strike is not in the public interest, hence the parties must talk and talk until an amicable agreement is reached," she said.

The strike has caused hundreds of service stations to run out of fuel and could cost Africa's top economy billions of rand.

"My report this morning puts dry sites at 264 across the country … 200 are in Gauteng," said Tania Landsberg, spokeswoman at fuel retailer Engen, which runs 510 service stations in Gauteng and 1,200 nationally.

Fuel industry employers include BP Plc , Royal Dutch Shell , petrochemicals group Sasol, Engen, Chevron and Total .

Shell said fuel distribution had improved after police stepped in to prevent further incidents of intimidation and violence at depots.

Logistics group GAC said alternative plans had been made to lift bunker fuel to vessels, although there were still delays.

Unions and employers are locked in their mid-year bargaining session known as "strike season," with many labour groups seeking wage increases that far exceed inflation.

Strikes are also looming in South Africa's key gold and platinum sectors which could threaten global supplies at a time when commodity prices are red hot.

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