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'Govt can't simply be a spectator if fuel retailers to survive drop in sales'

13 August 2020 6:50 PM
Tags:
SA Economy
The Money Show
Bruce Whitfield
Reggie Sibiya
COVID-19
Fuel Retailers Association of Southern Africa
FRA
drop in fuel sales
fuel retailers

Namibia's government assisted Covid-hit retailers, but SA doesn't understand how the industry works says Reggie Sibiya (FRA CEO).

Fuel companies' profits are dropping as the Covid-19 pandemic hits sales.

And with fuel sales used as a predictor of economic activity, that's more bad news for the economy.

While there has been a staggered improvement in volumes as the national lockdown cycled through Level 5 to the current Level 3, it's not enough says Reggie Sibiya.

The Money Show gets some insight from the CEO of the Fuel Retailers Association of Southern Africa (FRA).

Fuel is the engine of the economy - it is the greatest indicator of what is happening.

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

Sibiya sketches the steady annual decline even before the pandemic and then the 80% drop in volumes at Level 5 of lockdown. He puts the current figure at a decline of between 20% and 40%.

That is indicative of course of the issue of economy shrinking, industries not all opening up, and those that are opening up you've also got changes in lifestyle. People are working more from home.

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

It's a volume-driven business so if there's no volume it becomes a catastrophic situation.

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

He says the FRA has challenged government during lockdown, because it doesn't seem to understand how the industry works.

For example in Namibia, the government there actually assisted the fuel retailers with 50c a litre because they understood exactly what the impact is.

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

I don't think the industry will ever go back to where it was. We need to start thinking, what are the new ways of trying to actually survive...

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

That's why we are right now busy having a petition with our members to go to the minister of energy and say 'We cannot survive'. We have not been recovering all our costs. We're probably now under-recovering by close to 20c a litre.

Reggie Sibiya, CEO - Fuel Retailers Association of Southern Africa

Listen to the conversation in the audio below:


13 August 2020 6:50 PM
Tags:
SA Economy
The Money Show
Bruce Whitfield
Reggie Sibiya
COVID-19
Fuel Retailers Association of Southern Africa
FRA
drop in fuel sales
fuel retailers

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