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The strike by petrol attendants, among others in the fuel and motor retail sector, has prompted oil firms to consider installing self-service pumps in South Africa. This is unlikely to happen and will not help anybody except the oil companies.
Self-service pumps exist in many countries and clients can pay by credit card or by cash at a central cashier. There are isolated cases of clients filling up and driving off but generally security measures are in place to prevent this. The major difference between these countries and South Africa, however, is that they allow for differentiated pricing in the market for fuel and this country does not.
In order for a self-service system to work there must be a place in the market for cheaper self-service petrol stations, as well as more expensive ones with attendants ready to fill your tank for you. This requires either allowing the oil companies to set their own prices and compete on value for money, or the government setting two levels of fuel pricing.
In South Africa, the main priority of the government is job creation and poverty alleviation. It is therefore unthinkable that it will support a policy that would encourage such massive job losses and we can assume that prices of fuel services will remain the same across all petrol stations.
There is therefore no incentive for an oil company to install self-service pumps unless all other companies do the same – few consumers will choose to fill their own tanks if it costs the same to let somebody else do it for you.
Apart from saving a few frustrating days of strike action, there is no further benefit to the consumer from firing all the petrol attendants. The only result is lower costs and higher profits to the oil firms, and a severe spike in unemployment.
There are about 50 000 petrol attendants employed in South Africa and on average each supports six other people. Most are young, with an average age of 27, and more than half have worked in their job for more than five years.
On average, petrol attendants who have worked in their jobs for five years earn a gross monthly salary of R6 900 but individual salaries range from R3 900 a month to R9 000 a month. Seventy-one percent are male and more than three-quarters have completed secondary education.
Tempers among drivers may run high during strike periods but a survey by Caltex shows that over 80 percent of South Africans believe that petrol attendants add a valuable service.
It is also important to note that of the 300 000 workers in the retail motor industry, only 70 000 belong to the trade union organising the strike. Despite 68 percent of petrol attendants saying they are dissatisfied with their wage, many have admitted that the reason they have downed tools is for fear of intimidation. Given the context, support for self-service petrol stations is inappropriate and will not provide any meaningful benefit. It is not petrol attendants that are the problem, but rather the mechanism that ensures their pay remains fair and increasing at a reasonable rate.
Unions use force to demand brash and incoherent increases in wages, companies respond by pitching unreasonably low increments, and customers and the majority of workers are stuck in the middle wondering when the chaos will calm. Negotiation needs to change because in a clash of the titans situation such as this one, nobody gains and almost everybody loses.
Pierre Heistein is the convener of UCT’s Applied Economics for Smart Decision Making course. Follow him on Twitter @PierreHeistein.