Eastern Cape filling stations feel the pinch as purchases plummet during lockdown

Fuel stations are struggling with the reduced demand over lockdown.
Fuel stations are struggling with the reduced demand over lockdown.
Image: ROSLAN RAHMAN

Petrol stations are taking strain in the national lockdown as they have to stay open despite drastically reduced demand, yet they are excluded from most business relief measures.

The situation has prompted some to think of limiting trading hours or reducing shift size while others are staring closure in the face.

According to the National Employers Association of SA (Neasa), fuel retailers have fallen between the proverbial cracks as, based on turnover, they are not categorised as SMMEs. This means they are excluded from most relief schemes although, in all other respects, they are indeed SMMEs.

The reason for this anomaly is that a large portion of the price of a litre of fuel is made up of taxes, which leaves a very small profit after costs have been taken into account,”  Neasa explained in a statement.

 “Filling stations are classified as an essential service and are compelled to remain open 24/7, unless authorised to close (partly or in full) by the relevant oil company. During the lockdown, trading conditions therefore create a situation where income is reduced dramatically, but costs remain largely the same as the fuel retailer has very limited ability to curtail costs. This leaves the fuel retailer in a position where it is almost impossible to trade at a profit.”

Several filling stations contacted by the Dispatch this week painted a bleak picture of their plight.

A manager at a Mthatha filling station who declined to provide his name said they had to allow 80% of their staff to stay at home, either on paid or unpaid leave, at least until after the lockdown.

It's really bad,” said the manager.

We have lost a lot of service. We are even considering closing down the site.”

The manager said profit margins had slumped so low that the business was running at a loss.

Remember you have to factor in things like lights, electricity and overheads.”

Another filling station manager at one of the garages in Mthatha, who wanted to remain anonymous as she was an employee and not the owner, said the situation was so bad that they had to close up at night.

We have no choice but to close by 6pm. There are just no profit margins whatsoever.”

Jamie Smith, who manages a filling station near the BT Ngebs Mall, said they still operated 24 hours a day but with reduced working hours for staff.

Obviously profit has dipped but we decided to reduce the hours so that staff do not stay at home without anything.”

A manager in Butterworth, Nicole Owen, said the business continued to  operate 24 hours a day, with most of their customers being police and ambulance drivers.

“Compared to what we were expecting [because of the lockdown] we are not doing too badly,” she said, though they, too, had reduced working hours for staff.

An employee at a filling station in Amalinda told the Dispatch they were selling less than half of what they normally sold in a month.

Eastern Cape Chamber of Business president Vuyisile Ntlabati warned that many small businesses might not recover from the lockdown.

Their credit records will be tarnished. The biggest concern is that jobs will be lost,” he said.

sikhon@dispatch.co.za


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