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• Industrial users in South Africa are paying vast markups for scarce oxygen, a big industry survey has found.
• With hospitals using unprecedented levels of oxygen, all available output and logistics capability has turned to keeping them in stock.
• The result has been cancelled projects, and careful rationing, says the Steel and Engineering Federation of South Africa, with pain felt almost everywhere.
• The industrial users aren’t complaining, but they can’t wait for Covid-19 vaccines to make a difference either.
• For more stories go to www.BusinessInsider.co.za.

Oxygen is in such short supply in South Africa that some companies are paying 30 times the usual going rate to keep critical equipment going and projects on track, an industry body said on Thursday. 

The Steel and Engineering Federation of South Africa (Seifsa) polled 1,600 members of various associations, and found that not much under 80% of respondents had seen some level of disruption due to scarce oxygen.

Some companies said they had cancelled projects, or put them on hold, others said they would run out of oxygen within two weeks.

Companies with critical equipment that require oxygen were stretching what they have and rationing where necessary, Seifsa said – and in one case paying R4,000 for a bottle, compared to a usual price of R140.

Hospitals have been using unprecedented amounts of oxygen during South Africa’s second wave of Covid-19, and producers have scrambled to keep them in stock. Distribution has proven a particular problem with a shortage of bottles and tankers, even after the repurposing of nearly anything that could get oxygen from production plants to hospitals.

Both Afrox and Air Liquide issued force majeure notices to customers in the face of what they said was a clear ethical and moral duty to prioritise supplies.

Industrial users have accepted that need, but say they hope to talk to suppliers about future supply crunches.

They have also expressed considerable enthusiasm for the prospect of a Covid-19 vaccine rollout big enough to return the oxygen market to a more normal, and predictable, state.

(Compiled by Phillip de Wet)

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