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South Africa Oil Pay Talks May Resume Tomorrow to End Strike

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July 20 (Bloomberg) -- Royal Dutch Shell Plc, BP Plc and other oil companies operating in South Africa will probably resume pay talks to end a 10-day strike that has caused fuel shortages.

“We are consulting our members with a view to going back to the negotiating table tomorrow,” Clement Chitja, a spokesman for the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union, said today by mobile phone. While the union, one of four on strike, may temper some demands, it won’t settle for pay increases of less than 10 percent, he said.

Shell, BP and Petroliam Nasional Bhd’s Engen Ltd. unit have reported shortages at gas stations in Gauteng province, which consumed 37 percent of the country’s gasoline in 2009, as protests by striking workers hampered truck deliveries. Sasol Ltd., the country’s largest producer of motor fuels, reduced production at its Secunda plant.

Employers are offering an 8 percent wage increase, exceeding consumer inflation of 4.6 percent. The inflation data can’t be used as a benchmark because the calculation used to compile it is flawed, underestimating price gains, Chitja said.

Mxolisi Ratsibe, chairman of the National Petroleum Employers Association, didn’t immediately respond to a message left on his mobile phone today.

South Africa has six refineries with a combined processing capacity 692,000 barrels a day. They distribute fuels, mainly gasoline, by pipelines, rail, sea and road to about 200 depots, which in turn send fuel to about 4,600 gas stations, according to the South African Petroleum Industry Association’s website.

The country consumed about 11.3 billion liters (3 billion gallons) of gasoline and 9.1 billion liters of diesel in 2009.

To contact the reporters on this story: Franz Wild in Johannesburg at fwild@bloomberg.net; Carli Lourens in Johannesburg at clourens@bloomberg.net.

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net; John Viljoen at jviljoen@bloomberg.net.

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