COVID-19: Fuel Retailers: Falling between the cracks

COVID-19

FUEL RETAILERS

Falling between the cracks?

Judging from complaints received from fuel retailers, it appears that the Retail Fuel Industry is facing unique challenges in their fight for survival during the current trading environment.

Fuel retailers are, proverbially, finding themselves “falling between the cracks” as, based on turnover, they are not categorized as SMME’s (and are therefore excluded from most relief schemes) while, in all other respects, they are indeed SMMEs. The reason for this misnomer is that a large portion of the price of a liter of fuel is made up of taxes, which leaves a very small profit after costs have been taken into account.

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 under the current trading conditions.

Because of a very low turnover, the only real saving that can be realized, is employees working short time. As fuel retailers are not in a financial position to pay employees their normal wages, employees, who are expected to report for duty, find it difficult to meet their transportation costs.

It therefore needs to be determined how these difficulties can be addressed over the short term, at least until trading conditions return to normal.

In view of the above, retailers are requested to participate in a survey by clicking here.

The result of the survey will be published, but will remain anonymous.

NEASA 24/7 NATIONAL HOTLINE: 086 016 3272
legalhotline@neasa.co.za

Regards

We are all in this together.
Privileged and challenged to be South African.