Roy Cokayne

Unplanned oil refinery shutdowns have caused severe shortages of liquid petroleum gas (LPG) and bitumen, pushing the car manufacturing and road construction and rehabilitation industries into crisis.

The crisis could cause massive job losses, particularly among small, medium and micro enterprises in the road rehabilitation and asphalting sectors.

Bitumen and LPG are by-products of oil refining.

David Powels, the president of the National Association of Automobile Manufacturers of SA (Naamsa), said yesterday that original equipment manufacturers (OEMs) were major users of gas for heating, particularly of the paint shop, and the fact that four of the six oil refineries were not producing it had caused a “catastrophe”.

Powels said there was a need for a focused, structured plan “to prevent the economy grinding to a halt”.

All the motor manufacturers were still producing, but the full effect of the crisis was not yet clear and manufacturers were “living from hand to mouth”.

Powels said Naamsa and the National Association of Automotive Component and Allied Manufacturers (Naacam), with the Department of Trade and Industry, were exerting pressure on the Department of Energy to turn up the heat on the refineries to plan shutdowns better and shorten them.

Roger Pitot, the executive director of Naacam, described the shortage of LPG as “a disaster” for component suppliers because some might run out of supplies today and would then have to stop production.

Pitot said the LPG shortage affected ovens for plastic components and electrocoat facilities for metal parts, which were produced on a just-in-time basis for OEMs “and the day after they stop producing, the OEMs will stop production”.

Some parts suppliers had forklifts that operated on LPG.

Simon Miller, the manager of corporate communications at gas distributor Afrox, said the LPG situation was having a serious effect on the hospitality, manufacturing and automotive sectors of the local economy.

“In some parts of the country we have totally run out of the product with little prospect of recovering the situation in the immediate term, but Afrox continues to engage with all parties in an effort to find solutions for our customers.”

Afrox was committed to doing all it reasonably could to cope with the shortage but demand was outstripping its limited ability to import LPG.

Avhapfani Tshifularo, the executive director of the SA Petroleum Industry Association (Sapia), said the LPG and bitumen shortages were caused by a combination of planned and unplanned shutdowns at the oil refineries.

Tshifularo said refineries informed the Department of Energy of their preferred dates of closing and the department compiled a schedule circulated to ensure two refineries were not down at the same time.

But Tshifularo said Sapref, the oil refinery owned by Shell and BP, had had a planned closure but experienced a start-up delay; a fire at Engen’s refinery resulted in it fast-tracking its shutdown and starting it earlier. There was also an unplanned shutdown at PetroSA, which was apparently caused by an electricity problem.

Tshifularo said that Sapia hoped Sapref’s refinery would be back in production within the next two weeks, Engen’s planned shutdown would run until the middle to end of next month and PetroSA would be back up by the beginning of next month.

The department failed to respond to a list of questions on Wednesday night.