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By Edward West 
20h ago
The Minister of Mineral Resources and Energy urgently needed to step in to help fuel retailers in financial trouble, or many service stations would close, the executive director of the Fuel Retailers Association (FRA), Reggie Sibiya said yesterday.
Retail margin for fuel service station owners is based on a government-determined fixed penny-per-liter formula.
The FRA has pleaded with oil companies to help deal with the anticipated decrease in fuel prices for next month, Sibiya said.
Under the blockade, gas stations are required to provide fuel and groceries as an essential service, not only to the public, but also to designated services like the police and ambulances to save and protect lives.
However, its main source of income is fuel sales.
Lower demand for fuel, up to 90 percent at some service stations, meant that fuel retailers had overstocks that they had bought at higher prices, that they were going to have to sell next month at greatly reduced prices, or effectively at a loss. Sibiya said.
“Most gas stations barely survive. Cash flow is under extreme pressure, “he added.
And fuel retailers believe their financial problems will continue after closing as most customers have adapted to work from home, significantly reducing fuel demand. Retailers have had to introduce little time for their workers due to lower activity levels at service stations.
“The FRA is trying to help its members access the Unemployment Insurance Fund. However, with demand from all companies in the country, this process has not responded quickly enough due to the backlog of orders, “said Sibiya.
Additionally, the costs of Covid-19 lockout requirements have increased dramatically for fuel retailers, and they have to pay for supportive measures like disinfectants and masks.
The Automobile Association has said that gasoline prices, according to mid-month estimates, are likely to drop almost R2 per liter for 95-octane gasoline inland next month.
BUSINESS REPORT
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