Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma, said government will allow the energy and refineries sector to return to operation under the terms of level 4 of the national lockdown.
Dlamini-Zuma was speaking on Wednesday evening and unpacked which industries would be allowed to operate under level 4 of the coronavirus lockdown which will come into effect on Friday, when lockdown deescalates from level 5.
According to the South African Petroleum Industry Association, the local sector supplies to 200 depots, 4600 service stations and 100 000 consumers nationally.
Last week President Cyril Ramaphosa announced a five-level system would be put in place from 1 May to allow the economy to return to function in phases.
Coal miners supplying Eskom were allowed to continue operating during lockdown and mining companies have been granted permission to return to work on a case-by-case basis in recent weeks.
Dlamini-Zuma said bringing refineries back to operation under level 4 was a critical part of getting the economy ticking again.
“There will be more people on the road now needing fuel. So, refineries may now go to full capacity, including other facilities that provide fuel, including furnaces, smelters some other plants,” said Dlamini-Zuma.
Economist Mike Schussler said it was clear ahead of the announcement that these industries were opening up, saying that only 70% of firms in the economy could continue beyond a month without full operation.
“It’s a very, very small step in the right direction, but if we don’t open up the economy, we will be punishing the economy for a very long time,” said Schussler.
Schussler warned against micromanaging the economy at already desperate times. He said our peers on the continent were still operating at 50% capacity, while South Africa has imposed restrictions on the economy similar to those in Spain and Italy, two European epicentres of the pandemic.
Dlamini-Zuma said mining would be allowed to return to 50% capacity, subject to strict conditions, under the terms of level 4 lockdown.
“Mining will be allowed at 50% capacity, except open cast mining that can go up to 100%, just like the coal mining that goes to Eskom and there will be strict conditions under which the miners come back to the mines,” Dlamini-Zuma said.
She stressed that mining companies and refineries should continue to adhere to health, safety and hygiene guidelines to protect workers and respect the labour laws of the country.
“There will be fines and penalties for some of the offences. If you do something you are not supposed to do, some of these will mean fines or imprisonment,” she said.